Having a brilliant business idea is not enough. You need to prove to yourself and others that you have a plan to transform that idea into a successful business. Can you imagine building a house without a plan? Although it’s not impossible, building anything without a plan will surely lead to avoidable mistakes, higher costs, wasted time, lots of stress and regrets.
One of the main advantages of a business plan is that it increases your chances of attracting funding. If you’re looking for a loan or investment to start and fund your business, you need to have a business plan. If you want to attract funding from an NGO or crowd-funding platform, you’ll still need a business plan.
Why banks and investors insist a business plan
Business always involves risk and anybody who wants to give you capital (like banks, investors, partners etc.) is taking a big risk. And because these people don’t know your idea as well as you do, a business plan is the only thing that allows them to get into your head and better understand your idea.
Banks and investors are not gamblers. They won’t just give you their money and hope your business becomes successful and turns a profit. No, they prefer to take calculated risks. And one of the most effective ways to understand and calculate the risks in your business idea is to look at your business plan.
If a bank or investor had to consider applications for funding from several entrepreneurs, a business plan would surely be an advantage for those who have it.
Not just about the money
Even if you already have the money to start your business, you still need a plan. Remember the thing I said earlier about building a house without a plan? A business plan makes you more organized and better prepared for the challenging journey ahead of you. It helps you to critically analyse and structure your business idea. Above all, it will be the compass that increases your chance of success.
How to write a plan
Every entrepreneur need a business plan but only few can write one. Following are three ways of writing a good business plan.
Use a template or sample plan – By using a template or sample of a business plan that looks like something you want, you’ll end up saving a lot of time and energy compared to starting from scratch. If you don’t like reinventing the wheel, this option is for you. The only snag is that your plan may end up looking like somebody else’s. This is not for people who want a business plan that stands out and is completely unique.
Use business plan software – The right business plan software can be a huge blessing for those who don’t have the creative skills to design attractive plans, or the financial skills to prepare all the financial reports that make business plans a nightmare.
Hire a plan writer – For those who can afford it, this option will save you a lot of time and effort. All you have to do is give the writer an idea of the kind of business you’re trying to create and all the information he/she needs to develop a professional business plan for you. If you’re too busy, don’t have time to write a business plan by yourself or just want a professional touch, this option would definitely work best for you.