You must have heard the famous saying; entrepreneurs don’t plan to fail, they fail to plan. We regret to be harsh, but the truth is that 90% of startups fail. 21.5 % of startups get wiped out in the first year, 30% in the second year, and 70% in the 10th year. These staggeringly high statistics provide insight into the importance of planning at every stage of the startup so your business can not only survive but also thrive.
There are two types of business plans, one that you create when you start your business and one that you develop to grow your business. A business plan is a written document outlining and highlighting how you will achieve your business goals, encompassing information about your product or service, finances, and marketing strategies. This roadmap to success is not only crucial to break into a new market, but research shows companies with well-thought-out business plans grow 30% faster than those that don’t.
As competition continues to grow in 2022, every entrepreneur should create a business plan for their start-up at the inception stage and continue to update it as the business continues to grow. It’s like a guiding source that helps keep you on the track to success. You can assess the importance of a business plan from the fact that companies need it not to grow and develop but to merely survive.
If you’re thinking about whether you really need a business plan and if it’s worth your time and resources, here are 7 reasons to change your perspective to a winning mindset.
1. It Helps Secure Funding
If your start-up needs funding from an investor, bank, or venture capitalist, they will need to see a business proposal or plan outlining a need for your product or service in the market. This business plan will include your financial statements, making it easier for investors to understand your business model. This will also make potential investors confident that they’ll see a return on their investment.
There are a lot of start-ups in need of loans. Given how tough the competition is in 2022, it is imperative for you not only to have a business plan but a well-developed and well-structured one, preferably written by expert business plan writers. You can increase your loan approval odds by adding a comprehensive business plan that shows lenders you’re financially stable to repay their debts.
2. It Minimizes the Risk of Failure
Risk is an incumbent part of entrepreneurship. Launching a new product or service is always riddled with uncertainty, even if you’re a veteran. There is so much you don’t know – the market, the customers, etc. Naturally, you sign up for some of this uncertainty as a business owner, but you can take steps to curtail a part of this risk.
Instead of solely relying on your gut instinct, you need facts and figures to help make your path simpler in the business world. A business plan including competitor analysis and market research will help you identify any potholes and gaps you may have missed. After identifying these flaws, you can then develop contingency plans and make relevant adjustments to your business. This will help mitigate the chances of risk that could result in business failure.
3. It Will Help You Set and Achieve SMART Goals
SMART goals are a medium between too easy and too unrealistic. Every business plan outlines specific, measurable, achievable, relevant, and time-based goals to monitor their progress and set themselves up for success. Setting realistic goals is pertinent to aligning a strategy for the company that the higher management and employees can follow. Companies with SMART goals are 70% more successful, thanks to higher accountability.
Working without goals is like a horse on the road with blinders on. If you don’t set milestones, how will you know where you stand among competitors? Being static will eventually drive you out of the market, and that’s not a risk any business should be willing to take. Setting practical and attainable goals gives direction to the business and is vital to the growth and development of the company. As the business grows, the goals need to be updated along with the business plan, for which you can hire a professional business plan writing service. For example, as a start-up, your primary goal may be to break-even, but after you’re established, you might elevate your goals and aim for, say, increased profits in the next 3 months.
4. Forces You To Research and Understand Your Market
The success of an entrepreneur depends on how well they know their market. No matter what industry you want to penetrate, keeping up with market trends gives you the competitive edge you need to survive and grow in today’s competitive world. Most entrepreneurs adopt a rash approach and enter the market without sufficient market research. Drafting a business plan forces you to really know your market, bringing you closer to success.
There are many things you need to know – What are the latest market trends? What’s the size of your target market? Who are your biggest competitors? When you create a business plan, you automatically delve deeper into the market and gain a nuanced understanding of it. You can then use this knowledge to make more informed decisions about your business, improve your branding, identify new opportunities, understand your customers, etc.
5. Allows Business To Plan Their Budget
You may have secured a loan for your start-up, but managing your finances on a day-to-day basis is not an easy task without proper planning and budgeting. You don’t need to manage and plan your budget to maintain the financial health of the business but to do the bare minimum, i.e., survive. Many start-ups get wiped out once their operations run because they fail to anticipate the exact finances needed to keep the business afloat.
Most businesses fail due to a lack of working capital. A business plan that outlines how much money is required to pay fixed and varied overhead costs, funding payrolls, etc., will help the business owner meet their needs without going over budget. This business plan should be updated as the company continues to grow along with other expenses. A business budget plan will allow you to ensure you have the finances to meet current commitments, be confident in your financial decisions to meet objectives, and venture into new projects for the business’ growth.
You can hire professional business plan writers to give your business a financial direction. Most businesses fail due to a lack of financial planning. This business plan needs to be updated according to changing circumstances of the business, industry as well as economy. We will match you with an industry-expert writer to deliver the exact purpose of the business plan.
6. Your Business Plan Is An Asset
Entrepreneurs sell their existing businesses and start new ones all the time. If you ever decide to sell your business down the road, this business plan will come in handy, almost like an asset. A solid, well-developed business plan will set your business up for a higher valuation. While this may seem premature when starting a business, an entrepreneur should always think ahead.
Your start-up can be worth a lot more if your buyer is able to understand your business model and its financial nuances. A buyer will only be interested in your business if they see your business has the potential to scale. Ask any expert, and they’ll tell you that a business plan and business valuation are inseparable. Most investors steer clear of start-ups, but they may be convinced if you can use a business plan to establish your business’s worth backed by a valuation methodology.
7. Your Competitors Are Doing It
As an entrepreneur, you need to adopt a pulse-on-the-market approach. You need to be aware of the latest market trends, alright, but you also need to know what your competitors are doing. A whopping 71% of swiftly growing businesses have business plans, so there is no room for you to be left behind. Given the cutthroat competition in 2022, every business needs any competitive edge they can get to survive.
A business plan is a base for strategic planning, which is essential for every business. A business plan provides transparency that helps all the people in your organization plan and prioritize what they are doing, working towards the larger goals. But writing a business plan isn’t enough. It would be best if you drafted a well-researched and well-written business plan that will serve several uses, including acquiring loans, achieving business goals, and a stellar business valuation later on.
Hire A Professional Business Plan Writing Service
Now that you know the importance of a business plan, the key is getting started. However, entrepreneurs have several responsibilities, which leaves little time for them to do a satisfactory job. This doesn’t mean you deprive your business of reaching its full potential with a business plan.
While crafting a business plan isn’t hard, creating a well-researched one requires time, expertise, and effort. You need to cover the details of the business, the market in which you operate, the forecasted market trends, and so on. You need to assimilate this information into a compact, 15-20 page business plan, which is no layperson’s job.
Suppose you want a well-written business plan for your start-up or an established business. In that case, the best option is to hire a professional business plan writing service updated with the latest writing trends of 2022.
Content Development Pros has a team of expert business plan writers with years of experience drafting business plans over a range of industries will ensure that your plan can achieve the specific purpose you’re after – whether it’s convincing an investor for a loan or setting realistic growth goals and scale your business.
We work in close collaboration with our clients to understand the nuances of their business, and match an industry-expert writer to your project. We perform customized research and deliver professional business plans to provide your business with the edge it needs to survive in this competitive day and age. Let the professionals do their job while you concentrate on running the business.