Why Business Plans are essential for establishing long term success

Tayo Ayeni Contributor BLKPRENEURSHIP

Why You Need a Business Plan for your Business

When starting a business, it is important to draft a business plan to serve as a guide. Business plans usually help you itemize your business strategies, short-term and long-term goals, and your roadmap to achieving maximum revenue. It also helps you and every other party involved, to show commitment to achieving those stated goals. 

Many business owners usually go back to the drawing board to confirm that they are on the right path. This drawing board can be your business plan. It serves as a mirror, showing you the image of what is against what should be. Business plans can help you succeed in your business for so many reasons.

Importance of having a business plan

There are numerous reasons why every business should have a business plan, especially at the startup phase. A few of them are;

1. To set business milestones: Like the popular saying, If you fail to plan, you plan to fail. Business plans help you avoid failure by clearly stating milestones and timelines to achieve them. What do you want to do in the first year of your business? How many business locations (if physical) do you want to have by the fifth year? When would you like to create a website or build a mobile app for your business? Putting this in perspective keeps you on track so that every time you have something to tick off the list. This shows progress.

Entrepreneurs celebrating business success together

2. To know your competition: Before diving into any market, it is necessary to have full knowledge of existing competitors, so you are not relegated to the background. A business plan helps you critically understand who the biggest market players are in your business segment and how to hit the market as a major competitor. By developing these strategies to compete, you are setting your business up for visibility and success.

3. To know your customers’ needs: Businesses are only successful because of their customers. If you understand what your customer wants, and you can provide products and services to meet their needs, you are already on a path to success. You can also draft customer service guidelines to help your team achieve maximum customer satisfaction and consistent growth.

4. To create a revenue generation plan: It’s one thing to know what you want to achieve in terms of profit, its another to have an actual documented plan on how to achieve your revenue goals. A business plan will help you itemize ways that you can generate revenue, envisage challenges and come up with solutions to them.

Related: Five important factors to consider when applying for a business credit card https://blkpreneurship.com/2022/03/11/five-important-factors-to-consider-when-applying-for-a-business-credit-card/

5. To attract investors: When investors want to put their money into your business, they need to know that you have a good business strategy. What better way to prove this than with a business plan? Sending out a proposal with a business plan is so much easier cause everyone can see your financial strategy and financial projections.

6. To get bank loans: In addition to all the advantages stated earlier, business plans are also necessary when applying for bank loans. It doesn’t matter whether you are a startup or an existing business that’s been around for some years, banks usually want to see your previous financial statements and compare them to your plan. Your business plan would show them;• Business background• Financial plan• Market Analysis• Problems• Solutions

When a bank can see these things, they are most likely to approve your loan application and come up with a good repayment plan for you.

Business plans are necessary for any business to succeed. It is a good possibility many business owners are doing exactly what you do, so you must bring something different to the table to make an impact and attract customers. While crafting your business plan, you could do a lot of research that would help you discover so many possibilities that you probably haven’t even thought of. It could also help you decide the necessary stakeholders to bring into the team to make things work. In conclusion, a business plan can be your ultimate guide to take your business to the next level.

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