Why Does My Company Need a Business Plan?

A business plan is an essential tool for an entrepreneur for a number of reasons. The plan, often developed with the help of a business plan writer or consultant, serves to examine the feasibility of the company before you sink a great deal of time and money into the idea, to organize a plan of attack for the management team, and to seek funding and partnerships which may enable the company to launch. Market Feasibility Study By its nature, a business planning process begins with a study of the market for the business’s intended products or services, the strengths and weaknesses of competitors and substitutes, and the exact needs of potential customers. This research, if done on more than a superficial level, should show you whether your business idea has a real chance at success. Feasibility studies can be undertaken by consultants and research firms, and this may be a great use of some initial cash. However, make sure that the information gathered is all available to become part of the plan if you choose to launch. Organize Plan of Attack Entrepreneurs have many areas to focus on during the pre-launch phase and early stages of the company: legal and insurance requirements, fundraising, marketing, sales, operations, innovation, financial management, and hiring, for example. To juggle all of these balls at once, a plan is needed. The same plan that funders will look at becomes the basis for an internal plan of attack, giving ongoing guidance to the management on the steps to move towards launch and then profitability. Seek Funding and Partnerships Finally, the plan is generally essential to achieve funding beyond the resources of the entrepreneur and his or her willing friends and family. Professional investors and lenders need to protect their own interests by examining a formal business plan prepared in a similar method to others they might look at. The same goes for serious partners, whether they are individuals or corporations, who may join forces to help the company launch and move forward.