What is a Business Plan and 8 Reasons Why You Need One - Work at Home Trust - Work at Home Trust

February 13, 2018

What is a Business Plan and 8 Reasons Why You Need One - Work at Home Trust

If you have a business or planning on operating one, then you need a business plan. I know; I put it out there very bluntly and straightforward. But let's just face it - wouldn't you need a road-map, GPS or the like to reach your destination if you had never been there before? Even if you had, wouldn't it be handy to still have one in case of mistakes or forgetfulness? As a map guides you from one point to another, so does a business plan when it comes to running a successful business. So what is a business plan anyway and why is there so much emphasis on your business needing one?

What is a Business Plan?
You've probably heard it time and time again, "You need a business plan!" So it is only obvious to first know what a business plan is in order to understand the reasons why you need one. A business plan is the blue print of a business as it is, should be, its future, and steps necessary to make it successful. It is an outline of what you intend for your business to grow revenue, to gain profits, and what your financial forecasts are. A business plan records what products or services you provide, their rates, how to market them, and who your target audience is. It also allows you to know whether your business is flourishing after your investments. A business plan is basically a written form of what you brainstormed when planning on opening a business and what you change as time goes on.

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Important Elements of a Business Plan
 
Why You Need a Business Plan
  • To remind you of the great ideas and goals you initially had: I'm sure that when you decided to start a business, ideas started flowing through your mind. Imagine not writing any of those down. Wouldn't you eventually forget some here and there? Taking notes is a great way of preserving all your ideas and intended goals. A business plan also serves the same purpose. It is taking notes as you go along. 
  • To assist you in taking action on what needs to be done: Writing your objectives down is just the beginning of the tunnel. It is crucial to keep up with what has been written and follow up with actions. Your business plan will help you focus on what needs to be done on a daily basis, weekly, monthly, and even on a yearly basis. 
  • To show your accomplishments: It is very important to keep track of your accomplishments in order to avoid unnecessary repetitions. Your business plan gives you the opportunity to cross out all the goals that you have accomplished and move on to the next one without worries.
  • To help identify your company's strengths and weaknesses: Knowing your business' strengths and weaknesses is VERY crucial! Having everything recorded and outlined will help you direct your focus to the right place at the right time. Your business plan will show your step by step actions, what worked, what didn't work, and how it all happened. Knowing all these details will assist you in taking care of the problems. It'd help you focus on what worked and eliminate what did not work previously. Without a business plan, imagine remembering everything. Exactly; a chaotic mess...
  • To make sure that your team is on the same page: If you plan on working with other individuals such as sub-contractors, partners, or employees, it would do you and your co-workers a great service by having a visual outline of what the business is about and how to go about implementing what needs to be done. It saves you time by not having to verbally go through details. It also gives an objective blueprint of everything to your co-workers, saving them time, and preventing frustration and misunderstandings. 
  • To help evaluate your market and competition: A business plan is not only written for the start of a business, it is also meant to keep up with all the short-term and long-term activities of the company. That being said, it is very important to know what the market of your product/services is like and how to keep up with the trend. You should know what your target market needs because that will determine the success of your business. Knowing your competition is also a crucial aspect of your company's success. What makes you stand out in the crowd? Keep an open eye and take notes as you go.
  • To establish a solid back-up for financial support: If your business is in need of financial help such as grants or loans, having a business plan would be necessary to obtain financial support. Lenders or funders will usually NOT lend or grant your company money without providing them an official business plan. It is usually a requirement - it's that simple. That being said, if you are able to establish your business without taking loans, please do so. It makes sense because people want to know where their money is being used for and why they should give YOU the money. The last thing you need is starting a business with debts. But of course, some businesses do need assistance for capital investment from the get-go. So what works for one company may not necessarily work for another. 
  • To give you a clear idea of what is going on and what needs to change: Since your business plan allows you to micromanage your company's progress, it also enables you to macro-manage it as well. Micromanaging your business is controlling every detailed aspect of your company, whereas, macro-managing is when you control the overall business process. So having it all written down will keep everything neat and simple, and increase your awareness of the company's progress. Additionally, knowing what's going on will obviously help you identify what needs to be changed in order to reach your business milestones and goals.
These are only some of the reasons and benefits of writing a business plan among many. Next time, we will talk about the basic elements of what a business plan should have. In the meantime, try brainstorming your business plan based on the above information. If you have tips, ideas, or additional benefits of writing a business plan that you would like to share, please do so by leaving a comment below. Take care now.

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