10 Reasons You Need a Business Plan (& Free Downloadable PDF Template)

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There’s no denying that opening and operating a business is challenging at times. It takes encouragement, strategic thinking and courage to take your vision and turn it into a success. However, it comes with some incredible rewards. Whether you already own a business or are an aspiring entrepreneur, taking those first steps to turn your idea into reality doesn’t always feel like a straightforward process.

A quick Google search will show you endless results of business advice, from registering your name to finalising your marketing plan. Whilst any advice when starting your business should be welcomed, we highly advise that one of the first things you do is make a business plan (Click here to download our free business toolkit template).

A business plan is there to help you structure, develop and grow your business, allowing you to navigate the process and overcome any potential hurdles you might come across in the future.

In this article, we will be sharing our top 10 reasons why you should compose a business plan if you want your business to be prosperous.

1. It Shows Your Serious

Want to show that your business idea is serious and not just something you thought of the night before? Then you need a plan. Having a formal business plan in place demonstrates to potential partners, employees, yourself and anyone who will be involved in the business that you're totally invested and committed to building a profitable business. When you construct a plan, you're showing that you're serious about wanting to grow and understand ways to improve the business as a whole.

2. Reduce Your Risk

With any business, comes risk. This is where a business plan is a handy tool to help you determine if your idea is actually viable. Whilst writing a plan doesn’t take away all risks associated with starting a business, it helps you identify potential hazards that you might face. From understanding the market to recognising the operational costs, these are all things that should be covered in a good business plan. We suggest regularly reviewing and updating your plan, to further discover potential risks and weak spots.

3. Understand Your Competition

If you want to gain a better insight into your competition, then the best way is to write a plan that includes a competitor analysis. No matter your business idea, there are always going to be competitors with similar products or services. That’s why you must have a clear understanding of not only your competitive advantages but also your disadvantages. It helps you comprehend ways you can enhance your offering, to beat the competition.

4. Determine Your Financial Needs

Do you need to raise capital? How much do you need? Without having a business plan, it’s nearly impossible to know how much money it’s going to take to get your business up and running. You need to make sure that you have enough, planning for any future challenges you may face. Having a business plan also provides you with the knowledge you need to make a plan on how you will raise the funds.

5. Understand Your Customers

Understanding your customers is the first step to ensuring your business is successful. What do they buy? Why do they buy it? These are some of the questions every person starting a business needs to know. A business plan includes customer research, to help you gain a more in-depth understanding of your customers. When you have a better insight into the people you want to buy your products, in the long run, you can provide better products and services for them.

6. Test a New Product or Service

Whether you already run your own business or want to start one, writing a business plan is a great way to test a new product or service. When you have a business idea, it’s beneficial to take the time to work through all of the details. From determining your budget to comprehending the logistics of the product, having a plan can help you understand your idea better and also share it with others to gain feedback before getting started.

7. It’s Easier Than You Think

Most people believe that writing a business plan is either too much work or an overwhelming task. Whilst writing a plan does seem like it will be a lot of work, surprisingly, it’s not as difficult as you believe. We recommend using a business plan toolkit to help you get started, it includes all the details you need to refine your vision. You don’t need to rush through, whether you spend an hour a day or 10 minutes, you can work through at your own pace.

8. To Secure Funding

If your business will require funding, then it’s paramount to have a business plan. If you need financial assistance to get started and plan to pitch to potential investors or a bank, then you need to have your idea on paper for them to see. Anyone willing to invest in your business will want to know all the details, for example, the product or service you plan to supply or the number of employees you need to get started. A business plan shows that you're a genuine business that understands the details needed to be successful.

9. Set Actionable Goals and Measure Them

When it comes to starting your very own business, it’s important that you not only set out the goals you plan to achieve but also how you will measure them. Writing a plan allows you to understand the exact goals you want to achieve and when you want to achieve them. It highlights what success means to you. Maybe you want to reach 1,000 sales in the first month or want to have 3 employees by the end of the year, setting goals gives you something to work towards.

10. Uncover New Opportunities

Through the process of writing down your business plan and brainstorming, you have the chance to uncover new potential ideas. Whether you're writing your competitor analysis or detailing your plans for marketing your product or service, when you take the time to think more about your business, you will uncover new opportunities to help your business thrive. Whilst writing, you may even uncover new ideas that could potentially turn into another venture in the future.

Final Thoughts

Getting started isn’t always easy, but once you have a plan in place, it makes the process much smoother. A business plan will give you deeper insight into the most important things you need to know when getting started, such as your competitors, financial factors and your overall strategy.

Download this completely free and easy-to-use business toolkit to turn your ideas into reality. Business plan produced by Robin Wong, Executive Coach/Corporate Advisor and Monita Cheang, Management Consultant and Coach.

Or, if you’re still in need of support and guidance, you can find a free mentor on PushFar today.