Why should a Company have a Business Plan?

If you are planning to start your own business, you should draft your business plan. It will become the blueprint for running and expanding your business. The plan will be very essential for the following four reasons.

1. Maintaining the Business Focus

The business plan shows your company’s products, manpower, financial and marketing information. As you look to grow your business, you should refer to your business plan. The reason for doing this is to maintain the business focus as you make changes. If you are going to make changes to the business, then referring to the original business plan will help you to see how the potential changes can affect your entire business.

2. Securing external funding

As you start your business and as the business grows, you may need to finance the business or get funding for a new product or expansion. Financing begins from startup and continues for the full life of the business. If you are looking for outside funding, the first thing an investor needs to review will be the business plan. Whether it’s a private investor, bank or other lending institution they will need to see how you plan on running your business, what will be your expenses against your revenue and whether your business plans are attainable? A well written and thorough business plan should answer their questions.

3. Motivating strategy & growth

Starting a business is very unnerving for some persons, having a business plan will help to motivate you. The plan presents the business in an organized manner and if you had spent time to outline all the details of your business, it will help you to get your dream off the ground. Following the business plan will help you to map out the pathway for growth in your company. It will provide the confidence you need when feeling overwhelmed.

4. Informing Executive Talent

When the business grows, it becomes essential to add executives to your team who will help to move the company to the next level. The business plan will enlighten the executive team on your business vision and will help them to determine whether the company is worth their time and resources.

The business plan will remind you about the purpose of the business, your original goals and how new changes to the business can affect your original vision of your company. It will be necessary for seeking financing and guiding your team as the business expands.