Do You Have A Business Plan? March 24, 2009
The Importance Of Having A Business Plan
Here is a sobering statistic: On average 50% of small businesses fail after the first year. Starting your own company is a part of the American Dream. Keeping it going in the long run, that’s a whole other ball of wax. But there is hope. The most common factor among the other successful 50% is a strong business plan. Here are two reasons why this document is absolutely essential
A solid business plan is a sure sign of professionalism. It’s what separates the dreamers from the doers. A good write-up takes time and research and dedication but when you have one that works it tells everybody that your goals weren’t made up on the spur of the moment. It can also serve as a measure of your management and thinking skills.
Also incredibly important, it signals to lenders that you are not an overly risky investment. For small business owners, the economic times are tough but not insurmountable. Always remember that the credit crisis is a crisis of confidence. The money is there, lenders just have to be very careful that they can get a return on their investment. By having a well thought out business plan, you can soothe some of these fears long enough to get people to open their wallets.
It is crucial in being your own boss that your goals are always clear. A business plan can do this for you. If you were to open up a snowboard shop, how would you know which kind to sell. There are ones for downhill racing, freestyle tricks and back country riding. You might want to sell all three but what should their percentages be in the make up of your inventory. This will depend on your location, what kind of customers you have, and how much you are willing to pay for your inventory. This information will have to be researched and do you want to have to carry all those figures in your head? It’s better to have them all written out in a business plan for easy reference.
These are just a couple of the reasons to make sure you have a business plan early on. Fortunately the internet is full of samples, how-to guides and free advice. Just remember to take on a piece at a time. This isn’t something that will be completed over a weekend. Market research will take some time as well so don’t get discouraged.
Your plan is also not some one off document that sits in drawer forever. You’re going to take it out continually to reevaluate the direction in which your business is heading. It’s not an easy job but it is rewarding in the long term. So sit down, grab a pen, let your imagination run wild!
