It is said that a business plan is essential to create a company, but what exactly is it and what is it for?
A business plan is a map of your company, it is a guide that explains in detail to third parties what your project is about, how you are going to carry it out and what you want to achieve.
It is often thought that the purpose of writing this document is solely to obtain financing, either through investors or by presenting it to a financial institution.
However, the purpose and benefits of preparing this document go much further, it is a tool to understand how your business works in depth.
A business plan is not a document with hundreds of pages, which you should only write at the university if you study administration or business, a thought that is far from reality.
All business ideas are different, so all plans differ in length and complexity. You should only write what has a specific purpose for your business.
Also read: What is a company and what is a startup.
Over time, the preparation of business plans has become increasingly practical, simpler and faster, since neither you nor a potential partner or investor can waste time with a very long document.
In fact, writing a business plan is not recommended if you are just starting your company. First you must create, test and develop a business model that shows you that your idea works.
Once you have your business model, you will already have enough information to create a real and consistent business plan that allows you to leverage a company. If you want to learn how to start creating your business model, click here.
If you want to have real control of your company and act like a serious entrepreneur, keep in mind these 5 reasons why you should write a business plan.
Why is it important to make a business plan?
1. To avoid making mistakes that you will regret in the future
Writing a business plan is a planning process. Many entrepreneurs play trial and error, wasting valuable time.
What if you realize you chose a partner with the wrong skills and capital? What would happen if you realize that you don’t have a big enough market for your idea to be viable?
Exactly, you will have lost time that you could have gained doing these analyzes before.
Also read: 3 obvious reasons why you should have a business plan.
Developing a business plan will force you to research and understand your business internally and externally, helping you to foresee the future and avoid possible failures.
2. To ensure growth and financing.
Most businesses face financing decisions over time, and you won’t always be able to solve these problems with your savings, your salary, or the money of your family and friends.
If your company needs a significant injection of capital, you must turn to a serious investor who wants to be part of your project and for that they will need to understand what it is about.
You will need to see how your money will have a better return than leaving it in the bank.
Also read: How to start a business without asking for a loan.
A well-crafted business plan will answer the questions of any new partner or investor who is going to be part of your company. Can you imagine the opportunities you can lose if you don’t have it ready?
A good business plan can not only attract money, but also talent. If a person asks you about your idea, you can present an overview of your idea by handing in the business plan.
3. It will help you balance your emotions.
The initial stage of any business is full of optimism, you feel extremely passionate about your idea and all the money you will earn with it.
All these emotions cloud the path and prevent you from having an objective vision. Likewise, you can be full of doubts and concerns, which is why you must put your feet on the ground.
Also read: Step by step guide. How to make my business plan in 3 simple steps.
Developing a business plan will allow you to observe your idea from other perspectives and create a more realistic picture of your company, how you are going to develop it and what its purpose is.
You will realize that things are not as easy as they seem, that you will need more than optimism to succeed.
4. Clarity.
Writing your business plan will force you to investigate and analyze all the aspects that impact the development of your company.
Putting your ideas on paper will allow you to better understand your business and additionally create strategies to ensure its growth.
Also read: How to make the executive summary of a business plan, to get investment.
A business plan will show different alternatives for future scenarios, helping you define clear goals that maximize the use of resources.
Finally, it will allow you to have a broader knowledge of the industry and your target market, assets that will benefit you in the long term.
5. So that everyone works following the same goals.
Creating a company is an activity that will teach you to work as a team. In an ideal scenario, you will have people who have skills that you do not have or who contribute necessary assets to your idea.
They can be your friends or family, however you will need to build the guidelines and objectives that will not only guide you to create your company, but will lead any new member along the same path.
And remember that if you are really interested in creating your own business, you can purchase our book “How to create a company while working: Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
