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Why You Must Have a Business Plan

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These days, having your own business can be better than just being an employee. With the right capital and attitude, you may be on your way to reaching financial freedom. Moreover, it is also advisable to have a business plan for you to be guided on how you envision your business to be. A business plan is not just about planning; it may be the key that will open a lot of opportunities for you and your business.


First of all, having a business plan allows you to set specific objectives. This is especially true for managers so they can establish what will happen to the business. These objectives must be tracked and followed through and your business plan can help you do those. Having clearly defined objectives will make you organize, plan, and strategize well.


Aside from priorities and strategies, a business plan also allows you to share your action points with the people you love. Yes, you should not just share them with your business partners and colleagues; your partner, significant other, or spouse may help you in ways you would not expect. By sharing your business plan with them, you can improve your communication skills, which you can also apply when running your business.


As your business grows, you will need to consider if it is necessary for you to expand its location. Do you need to rent a bigger office space? Rent is usually a fixed cost and the bigger the space, the bigger the rent. Having a business plan can help you analyze your growth prospects and budget so you can decide whether or not it is okay to have this increased fixed cost.


Aside from possible increased rent, you will also need to think about hiring new people as your business expands. This can be a risk, yet it is also a duty if you want your business to expand further.  Your business plan can make you clearly determine the logic behind hiring new employees and identifying the roles they will have to help your business grow. In addition, training new employees can be smoother and easier if your business plan addresses this aspect.


Another thing to consider is buying or leasing assets. How many should be purchased or leased? How much are you willing to spend buying or leasing them? How long will you use them and how important are they in running your business? These questions you ask and more can be answered by your business plan as it can be your guide in deciding what will happen to your business assets in the future.


One of your business goals is to develop new alliances. Use your business plan to find and communicate with potential partners who can help in the expansion and further development of your business. Include the standards or criteria you’ll be looking for to find alliances that are compatible for your business or those who have the same vision as yours.

Aside from alliances, you would also want to have investors. Usually, investors want to see a company’s business plan first before they decide to invest in it. Having investors is great for any business because they can help increase revenues, so make sure that your business plan is clear and complete. Convince them that your business is worth investing in.


Just like with investors, a good business plan is also needed to convince lenders to grant you a business loan. They expect you to have a plan on how to earn back and pay the money you will be owing them, as well as back-up plans in case any problems turn up.


Whatever kind of business you have, one thing is for sure: you want it to sell. Whether you are selling goods or offering services, you want to eventually have patrons who will keep your business afloat and boost your sales. Therefore, having a business plan can aid in making your clients understand what you have to offer, how much it’s worth, and why they should have it. In short, your business plan can be a good marketing tool if made properly.

One way to know that your business is growing is if you start to think of having another business, related or otherwise. Use a business plan to know the steps you need to take to make your new venture successful. What do you need to do? What resources will you need? How many people do you plan to hire? Your business plan will highlight the factors you need to consider to start a new business.

You must have a business plan to help your business grow. Strategize well and prioritize the distribution & allocation of your resources with great care. After all, you would not want your business to be stagnant, would you?