Why Is It Important to Have a Business Plan?
Even the smallest business can benefit from writing up a business plan. A business plan allows you to communicate your vision to others and persuade them to help you meet your goals. It will include thorough market research and detailed information about your marketing strategies, target audience, staff, obstacles and goals.
A business plan will include an executive summary. This is a brief summary of the entire plan and should catch the investor’s attention. The plan will also include detailed information about your management team, information about the products or services you intend to offer, a market analysis of your industry, your marketing strategy and a risk analysis. It will include charts detailing financial projections over the next one to five years. These may include projected profits or losses, break-even analysis, cash flow projections and balance sheets.
If you intend to seek financing for your business, you must have a business plan. Investors will pay close attention to your personal financial statements and financial projections. In particular, investors want to see that you’ve set milestones and implemented realistic tools to measure your success. Investors may also want to know how much you intend to spend on such things as marketing. Furthermore, investors are particularly interested in your management team and ensuring the team members have the right skills to help run your business.