A Plan Written Down Is A Plan Well Executed

Updated: Mar 20

5 Reasons Why Having A Business Plan Is Important!

Starting any kind of business venture is all about proper planning and calculating risks as well as opportunities. Although your business may start off as a dream, having a proper plan and executing on that plan will set you apart from the dreamers and the doers. Those who start a business without a proper business plan are bound to start making many avoidable mistakes.

Today, Nxt Level Growth is going to share the reasons why a business plan is important, and how this is going to be extremely lucrative if you want your business to succeed.

1. A plan helps you avoid serious mistakes

There are many issues that can make a business fail, but sometimes the most evident of those reasons are not taken into consideration. For example, not being able to analyze the demand for your product or service, or coming up with a price that is not going to be ideal for your target audience. Another common mistake is not realizing who is your target market or even marketing your business at the right time. Talk to business owners and ask them what they wish they had done different when getting started. Research your competition and find out what they are doing and how you can set yourself apart from them. Read Google reviews and listen to the wants and needs of the customers. See what they are saying about your competitor and learn from their mistakes and more importantly, learn about what they are doing right. There are endless options out there to help you avoid mistakes early in your business creation and this is not a time to be prideful or think you know it all.

2. It helps you qualify for loans

You are never going to get a loan approval for any business starting up or one that has been in business for years when it has no plan behind it. Most lenders want to know what you are planning to do in order to make sure that your business will succeed. Creditors not only need to see the plan, but they want you do research on your own to make it even make sense to yourself. What are your strengths, weaknesses, opportunities and threats (SWOT analysis)? They want to see how much you are asking for and what you plan to do with the funds down to the last $1. No bank wants to take on the risk of not being paid back the money that they lend to you and truly don’t want their risk to be higher than it should. Business plans can also qualify for grants as well as non traditional institutions like the SBA which helps fund a lot of new businesses.

3. It will allow you to decide your investments wisely

A good business plan is always going to help you find clarity in order to decide what you are going to do with your business capital. Do you need a new $75,000 stove or could you benefit from 2 stoves for a total of $50,000? Should you start off with a food truck or get a building that you know isn't an ideal location just to say you own a brick and mortar business. Do you prepare your own taxes or set aside enough funds to hire an accountant or CPA to handle all of your finances (Hiring someone is highly recommended)? Choose the dollar amount wisely but also make sure you have a solid plan on what you need to sale in order to be able to pay the funds back. A wise man once said "If you fail to plan, your planning to fail" - Benjamin Franklin. Nxt Level Growth writes business plans and hiring a business plan writer is one investment that is a wise investment.

4. It will help you minimize risks

A business plan is always going to be a great way for you to minimize your risks and ensure that you are able to avoid anything that is going to set you back. What you do not want to set you back is the loss of reputation, loss of a major client, and loss of moral on your team. Minimize these risks early by putting together a mission or vision statement and don't lose sight of the meaning behind the statement. Remember what got you to where you are today and never get too ahead of yourself. Being a business owner is not easy and the minute you decide to open up a business you have already assumed risk. Please note that it is okay if the plan fails. It is what you do once the plan fails to determine your next steps.

5. It allows you to set milestones

Milestones are specific goals that can be achieved and always important to consider and determine. Most business plans want to know what your financial projections are for at least the first three years of you getting started. They want to see the first year broken down for each new month that you are open. The next 2 years lenders would like to see a quarterly break down. Be specific and realistic because all businesses experience short falls so planning for them will help you prepare for what to do in these cases. Will your business be affected by seasonality? If so, you may need to hire more staff during your busy season and prepare for layoffs when things get slower. Will you do really well during the holiday months and slow down in the summer? Knowing this will help you understand what inventory you need to buy in advance to prepare for the holiday season and what sales you may need to have to cut your inventory in half if you don't finish how you wanted while still making a profit. Milestones also assure you that things are going well or even better than expected. If you set a goal of $10,000 in revenue during May and you actually achieve $12,000 in sales, just think how happy you will be! Setting milestones is going to provide a much-needed sense of direction while you are moving your business forward.

All in all if you plan ahead, you could avoid a lot of mishaps that others have made and it allows you to help set up realistic goals not only for the business but for yourself. If you want to take your ideas to the Nxt Level contact Nxt Level Growth for a free 15 minutes consultation.

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