You have your idea, you have a planned approach for your plan of execution on your mind and you want to get things going. However, your entrepreneurial lifestyle could not afford lapses in infrastructure and this is why writing a business plan will help you figure out the things you need to have planned in writing. Without further ado, here are the things you need to know :
1 . It Will Structure Your Ideas.
Before having your business plan written, your mind is overwhelmed with ideas and excitement. Writing down your ideas will help you in brainstorming what your concept stands for. This will help in getting a better understanding of your target market, what needs to be researched, what unique selling points can be featured and so on. Outlining your ideas in a simple format is most definitely how you should start. Your crazy disorganised ideas will suddenly take shape into what builds up to become your concept as a whole.
2. If You're Looking To Get A Bank Loan, A Business Plan Is An Actual Requirement!
Obviously, if the bank is considering whether or not to give you a loan for your startup, they will need to be sure that you know what you're doing. They need to evaluate the validity of your application by measuring the potential behind your business plan and of course, the chances of getting their money back. Their decision is greatly based on your business plan and they act accordingly. Nevertheless, there are some other participating factors that may affect their decision such as your personal credit score if you were a main director of the company and the size of your loan. Focusing solely on the importance of the business plan, just having it clear and well structured in its format will massively contribute to your chances of being granted the loan.
3. It Will Help You Improvise Further On Your Ideas.
Once you have your ideas written down, you will simultaneously find alternative ways of going about your ideas and expanding them further. For instance when you're structuring your plan of execution and you're about to draft the marketing strategies segment for your project, your understanding of the previous parts will help you come up with different strategies for marketing your product(s) / service(s) and allow you to lay them out accordingly and place them on a timeline. This will help you then analyse their importance in that particular timeframe you are working with and therefore help prioritise them.
In another take on this idea, writing down the features of your concept may lead to more brainstorming around the features and how these could be improved. As an example, let's say you had an idea about a bicycle design. The main USP of your bicycle is its ability to balance itself, let's say. When you write that down you might ask yourself "well what if we have automatic seat-heigh adjustment added, a leather pad for more comfort, carbon fibre materials to make it lighter and more rigid" etc. In this example, your initial idea has been developed into a more sophisticated one. You would then work on the logistics and planning actions adhering to those changes.
4. It Becomes Your Point Of Reference - For You And Your Investors.
Your complete business plan will become your point of reference. Even after your project is up and running, you will always need to check back on your targets and strategies. This will help you assess your current situation against the forecasted one you put in your business plan. It will also come handy throughout the process, as you may need to check your orderly managed plan of execution.
What's more, similarly to providing your business plan to the bank representatives, potential investors will want to have a look at your business plan. They would not be lending you money, but they would need to assess their own ROCI (Return On Capital Invested) and decide whether or not they want to invest in your business.
5. It Says A Lot About You.
When investors think about investing in something, they are most likely looking at 2 things : the product and the person handling it. The successful combination of a good product is a right person and a good product. A good product with the wrong people managing the project is not a very potential one and vice-versa; you cannot have a good businessman with a bad idea. This is why both should complement each other and frankly, if you have that good product and are think you are the right person to make it happen, then show it off! Your business plan is the perfect place to do it and that's what investors and lenders want you to do. They want to know that their money is in safe hands and if you have a lack of credit history and / or experience, this document is your first key to success. They want to know that you are focused, organised and confident with your ideas, and if you are, then there is no doubt that you have the full potential to achieve that target you are looking at.
What are you waiting? Start it now!