6 reasons why all businesses should start with a plan
Having an idea for a business is one thing, but getting that business off the ground takes a lot of effort if you want to stand a chance of success. We we’re inspired to write about how important a business plan is by Midven’s business plan advice, which contains some vital information on how to structure a business plan for those looking for funding.
Taking your initial idea and developing it to a viable business is a process, and one wrong step can leave you either down and out or spending a lot of time recovering. As this is the case, making sure you know all the right steps to take is imperative before you even think about trying to get a business off the ground.
What is the first thing you need when starting a business?
So, with the above in mind, where’s the best place to start? After you have the idea for a business, you need to lay the foundations to ensure that you are prepared for circumstances that may arise. The only way to do this is to have a plan – therefore, the first step you need to take is to formulate a business plan.
Even the best ideas require planning. In fact, there have been many businesses that could have potentially been successful that have failed because they did not have the plan in place to go forward. Once you start to work out a business plan, you will start to understand if the initial idea is viable and what problems may occur.
We’ve collated these handy resources to help you structure your plan:
Why is a business plan that important?
- To set long-term objectives – having goals will give you something to aim for in the short and long-term.
- To work out feasibility – an idea might sound potentially groundbreaking, but a business plan will start to show you where there might be flaws and opportunities. Once you have established these, you can then start to work out if it is worth continuing with the idea and how to grow.
- To work out financial forecasts – vital for forecasting the present and future health of the business.
- To research your competition and your prospective customers – having this information to hand before you start is vital because it will give you an idea of the number of potential customers and how many companies that could compete with you.
- To map the future of your business – of course as your business develops the goalposts will move, but having an initial plan is a great way to come up with a comprehensive strategy.
- To gain investment – an investor will want to see a business plan with carefully thought out ideas, realistic targets, proper financial forecasts and ways to deal with setbacks.