Why You Need a Business Plan

There are many businesses running without a business plan. And many businesses fail also!

One estimate says that near to 90% of small businesses fail within first 5 years of operations.

Is there a co-relation between lack of a business plan and failure? So do you need business plan?

I do not know the answer, but why not be a pragmatist and let someone else find out!

You may want to create a business plan because you want to –

  1. Stay organized
  2. Measure performance
  3. Quickly identify potential issues
  4. Get the funding

With a business plan you can detail –

  1. Goals
  2. Strategies
  3. Financial projections
  4. Competitive environment
  5. Target audience

You also get to identify the resources and policies necessary to make the plan successful.

And when necessary adaptations are required, you can make them to your business because you know where it is going.

Last but not the least, a business plan is often required when seeking financing!

Your potential investors – banks, angel investors, or any other sources will want to know about your business and the things it is doing and will do in future.

Let us take an example of a specific business plan.

The Subscription Box Online Business Plan – a hypothetical business plan.

This business plan is designed for an online business that specializes in offering monthly subscription boxes.

The boxes come with a variety of products that target a specific niche or target market.

We will discuss about the specific elements required in a business plan later, but let us outline the general information that this business plan will focus on –

  1. Startup costs
  2. Market research
  3. Product/box creation
  4. Marketing strategies
  5. Financial projections
  6. Projected profitability

In addition, the plan will also cover customer service, accounting, supply chain, and logistics.

In general these are the types of information that a business plan deals with.

Specifics will vary according the requirements of the business, but we can create a solid business plan with information on these parameters.

So, you have read about why you need a business plan. But do you have what it needs to be a business owner?

That is the most vital information you will need.

Not everyone is suited to run and business. Business takes hard work, dedication, and one minded focus for a long duration.

So, do you have it in you?