Why Write a Business Plan for My Small Business

Posted by James on Saturday October 4, 2014 at 11:2:18:

The first step towards any business success - whether small or big is creating an effective business plan. This plan is meant to guide you in making decisions concerning your business, from hiring employees to obtaining funds and even plans for possible expansions. It helps keep you focused. A business without a plan is considered ruthless as its activities will likely be haphazard and ineffective. Contained in this article are very important reasons why even as a small business, you need to create a business plan if you don't have one already.

Risk Assessment
This is a very important role played by a business plan for any small business. In simple terms this is keeping the base of your business covered. This is where you acknowledge and take into consideration the possibility that certain things, machine, resources could go wrong in future and could greatly affect your business. It also involves coming up with possible solutions giving your business a huge chance of succeeding. Every business at one or the other will have to face a challenge or risk. At the point where things don't go as planned, what do you do? This is where a solid business plan comes in- providing a cost effective strategy for dealing with them.

Management
A business plan is supposed to serve as a management tool, evaluating every progress you make and also provide with insights those parts of your business that still need little attention. In other words, a plan helps you to manage your business effectively and also to gauge your progress successfully. This could also mean modifying your plan and making adjustments according to certain changes that may occur during the course of your business. This changes can be as result of economic conditions and lots of other circumstances.

Getting Funding
Funding is an important aspect of any business especially the small businesses. A business plan can help you get funds outside for your business. Most of the times before any investor or lender will attend to you, they will want to ensure that you have a good business plan. Nobody wants to take a risk without being sure of whether you are serious about what you do - this is what a business plan does. It goes a long way in letting investors know about your operations and goals.

The importance of a business plan for a small business can not be overemphasized as it serves as a frame work for your business operation and provides details of your business and its future plans. With a business plan, you are able to deal with issues before they become a problems and as a result you save time and money. It is important that I note here just because you create a solid business plan does not in any way guarantee that you will succeed in business and it will not even ensure that you will attract investors that will help you get started. It is basically a way of describing what your business is and why it has come to exist.