Why You Need to Have a Business Plan

After reading the steps in creating a business plan, you may start to think that this is something you simply do not have time to do. However, having a business plan is among one of the most important steps when starting to make money online. Here are just 10 reasons why your business needs a plan.

Have Your Goals Written Down

Whether your goals are financial or not, having those goals written down is extremely important. It means that you can look back on them when times get tough and you start struggling for money. It will also give you the push you need to make your business better, whether through a different marketing strategy or by creating new products.

Your Reasons for Starting the Business

As well as the goals, this will give you the chance to write down your reasons for starting your business. This could be because you want to start making money yourself or because you want the ability to choose the times and days that you want to work. Remembering why you started the business in the first place often helps those when times are hard, money isn’t coming in and the motivation starts to dwindle.

Gaining Financial Assistance

Lenders and investors need to see a business plan to determine whether you are worth lending to or investing in. Some will read the whole plan, while others will stick to the executive summary. Without a plan, it is unlikely that you will gain any financial assistance, which will mean that you need to support your business from your own savings.

Deciding on Extra Costs

If your business is growing, you may think about renting a space. This could be to store your products for shipping or an office to offer your services. A business plan will help to show your growth and financial predictions and will help you determine whether the extra costs really are worth it at that time. You may find that you are better off waiting for another year.

Handle Lawyers and Accountants

The next benefit is the ability to share your ideas and plans with professionals, such as your solicitor or accountant. You do not need to share all the plan and can select snippets that are specifically for them. For example, your accountant will need your financial sections and your lawyer will need to look into managerial and goals.

Help to Sell Off Your Business

If part of your exit strategy is to sell your business, then you will need a plan to aid with that. The plan will help potential buyers see the initial goals, the profits and losses and the managerial team. This will help potential buyers determine whether it is worth their money. Likewise, if you plan to leave your business to family, your plan will help them determine the next steps to take to continue your legacy.

Help Value Your Business

Like with selling, if you come to need to make a valuation on your business, the plan will help with that. There are many reasons why you will need to evaluation the total financial worth of a company. You may be getting divorce, you may need to sell it on, you may find that you are struggling financially or it may be for tax reasons. Those are just some examples. The plan will inform the person valuing your business about what the business does, the cost of everything that the business does and the profit expected from the everyday happenings.

Create a New or Side Business

There are times that you will want to create a second business or a side business. This may work in-line with the current one or be a completely new business. By having one plan already, you will be able to use that to be able to create your new business plan.

To Expand Your Business

As a business grows, you may decide to open up a new store or expand it to offering a brick and mortar shop as well as an online one. By having your business plan, you will be able to see if this is possible and look into the steps to make this possible. Your business plan is easily adaptable to add on business growth and you can update your goals as you do this.

Track Your Milestones

As you develop your business and create a plan, you will need to set milestones. These are goals that have set dates for the completion by. The benefit of having them on a plan is that you can track them. You will be able to determine whether you are on schedule with any updates and with the creation of your company. By staying on track, you will show that you are determined to make this happen, which will help any loan application or looking for investors.

A business plan will help your company in many different ways. Whether you are a freelance photographer, eBay seller or wanting to set up a new company, you should create a business plan today!