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What our members have to say...
"I was (and still am) a registered entrepreneur through this site and managed to set up with the help of someone who liked my proposal. I set up a property company which is beginning to take off thanks to help from this site."
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Paul Kewley |
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Why you need a business plan when starting up
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Planning is the process of thinking about steps required to achieve a desired objective or goal. Planning is critical for a flawless execution. Better planning ensures less roadblocks and comparatively smooth sailing. Planning reduces uncertainty and ensures that there is a roadmap to achieve the goal.
Planning is vital, whether you are going on a vacation or implementing a new system. It becomes more so important when it comes to start your own business. Before starting a business, you should create a plan outlining, what your business idea is, what is the gap or need that you are going to fulfil, from where the resources will come from, how the cash flow will look like and finally when will you break even and start making a profit. A plan should also include projected profit, loss and balance sheets for next 3 – 5 years.
A business plan is a document which contains the business idea, a marketing plan, a resourcing plan (including human resources) an operational plan and a financial plan. It also contains an exit strategy in case if you want to exit the business.
Its important to create a business plan before you start your own business, the plan gives you clarity, direction and assurances that whatever you are doing in right, if you are in doubt you can always refer back to the plan.
A business plan can also be used to generate funding for your start up. You can present this business plan to VC’s (Venture Capitalist) or PE firms, which in turn may invest in your start up business. But if you only have a Business Idea and no business plan to back it up, it’s very difficult to convince people to invest money in it.
Also as your business plan contains a financial plan, this gives a fair idea to VCs and PE firms of what to expect on their investment in coming 3- 5 years.
Creating a business plan is critical for start up business because:
• It clearly defines the Business Idea.
• It identifies the business goals.
• While creating the business plan, the thought process helps refining the business idea and implementation strategy.
• It helps ironing out issues (if any) in implementing the business idea
• It helps in identifying and preparing for possible obstructions.
• It helps in clearly identifying customer needs and market gap.
• It helps in identifying the target market for products or services offered.
• It helps in facilitating funding from various sources.
• It helps in minimizing operational hassles when your start the business.
Most of the start ups are short on cash and they need funding, any investor would not like to invest in business for which a proper business plan is not available. A business plan indicates that the start up is serious about business; it also exhibits a professional approach of doing things. Presence of a concrete business plan will give an investor a much needed assurance that his money is in good hands and he can trust you with his money.
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