Tell your entrepreneurship venture’s story with a business plan (BP).
The easiest thing in tapping into entrepreneurship is a business idea. Building a business is a lot of work. You may have a business idea but have no clue where to start.
While your business idea is a start to small business entrepreneurship. But, bringing successful business ideas to life, well that’s another story.
Its hard work includes brainstorming, determination, and having a sound action plan.
Have a Business Plan
For your business to start right, you need proper planning. Whether your venture is a brick-and-mortar or an online enterprise, you need a plan of action.
What is a business plan? A business plan is a written document that summarizes the entrepreneurship ventures.
In a written plan, identify and define all your enterprise development strategies. As an entrepreneur, you will be able to refer to your written business strategies to guide your endeavors. Your well-thought-out business proposal will also help you to recall the goals you envision the startup will accomplish.
Let’s consider some business plan benefits.
Advantages
Bad business ideas, wrong business companions, and lack of leadership cause business failure. Additionally, some eager persons pursue an entrepreneurship course without a proper business plan. They may reason that a written business plan is not necessary. While a business strategy document is not a foolproof way to success, it’s still good to have one. Here are some advantages of having a business plan.
- Good business ideas need brainstorming. You want to find the right strategies that will help you to achieve your business idea. It is advisable to have a BP before you start any entity. Brainstorming your business idea helps you to think of various business strategies. Document the information gathered during the process of brainstorming. You will be able to see your business from a different angle. You will often come up with new ideas to market and run your business.
- Attract stakeholders with your business proposal. Do you need partners to join your business startup? Are you looking for investors to fund your business? Stakeholders love innovative business ideas. They can test to see if you qualify for small business grants. A business proposal presents you as serious and committed to building the company.
- Show that you understand your competitive advantage. You can expect to have competitors. When creating a business plan, you will analyze the competition from other businesses. Your enterprise development document will help you to have a better understanding of your competition. All businesses have either direct or indirect competitors. A written plan will detail your business’s competitive advantage.
- Assess your business’ financial needs. An operational plan helps you to estimate your startup financial needs. The business plan creation process helps you know exactly the capital needed. Asserting your business’ financial needs is necessary when raising capital for a business.
- Encourage investors to spend. A business proposal encourages financial opportunities. It answers most of the questions asked by potential investors. For example; why is it necessary to have your product or service in the market? What are your business strategies? What are your financial projections? Detailed and well-researched answers to these questions will attract financing of your business. If investors like what they read it will motivate them to fund your business project.
- Reduce opportunity cost. Small business startup ideas will do well with a written proposal. In your mind, your business idea is innovative. Yours is the best of all business opportunities. You think you have spotted a goldmine. Moreover, you believe that your idea will create new markets. Your business proposal reduces the risk of going after a wrong opportunity. The comprehensive document will help you to reduce opportunity costs. It enables them to assess the attractiveness of a particular opportunity.
- Get an overview of the skilled staff you need. A business proposal provides a forecast of your business’s staffing needs. You will be able to expand your workforce as necessary. Your startup plan will help you to know the skilled workers needed to carry out your entrepreneurship idea. You do not want to be shorthanded after you start a business. A business document provides a forecast of your business’s staffing needs. Ensuring smooth expansion, there will be no surprises.
Disadvantages
The best business to start has a great strategy for success in place. It is a written document that provides direction and strategy for your entity. But, the business plan has its disadvantages. Here are some of the disadvantages of a business plan:
- Drafting a business plan does not involve direct selling of the product or service. Many entrepreneurs may consider the time they take to develop a business plan. It could be time-consuming. A comprehensive business plan may take several hours per day for several weeks.
- Many businesses have failed because the entrepreneurs did not create a comprehensive plan. Entrepreneurs may take shortcuts hence writing a entrepreurial guide that is not complete. An incomplete business plan could lead to an unwise investment of resources. Then a financial collapse.
- Lack of business proposal writing expertise. Entrepreneurs who lack the expertise of coming up with a business plan may turn to experts for help. This can place a financial burden on entrepreneurs now starting their business ventures. Especially if that business venture is a small business.
Closing: What does a business plan consist of?
Smart entrepreneurs have a business plan. A business plan is a document that outlines the strategies of a business venture.
It also dictates where you will get capital for your business and sets out your financial projection. The business plan documents everything you envision your entity will achieve. It speaks about the present and future as well as how you will achieve those things. It is good to have a properly drafted business plan. You can consider it as your business blueprint. Filled with guidelines to make your business succeed.
Without a good strategy, the business will not document its plans. This will result in the business not having a defined step to follow. Further, the business will not be able to raise capital. Financial stakeholders want to see a business blueprint before investing in the business. No drafted plan means that the company cannot monitor its progress. Thus, the business is unable to see whether it accomplished its milestones and objectives.
Throughout your entrepreneurship idea and cycle, you can revert to your written strategies. Use it to test and monitor the current stage of your business. If necessary make adjustments as needed.
