We all have great ideas, some of us explore those ideas, some even build those ideas into side projects and hobbies, then there are the few that build their great ideas into thriving and profitable businesses.
How do they get there? They plan and are not afraid to search for the best advice and execute.
Here are our 4 top reasons why you need a killer business plan:
1. You need to place your brand
Building a business plan helps to establish your company’s position in the market. This clarity allows you to explain the business, its position and the brand to consumers, investors, and potential partners. No point having a great product or service if you have no idea who’s going to want it.
2. To uncover new opportunities
Writing it all out is not only therapeutic, you will most likely see your business in a new way. Through the process of brainstorming and seeking advice as you write, you will come up with new ideas for your product/service, branding, marketing strategy and business model. If you are seeking seed funding, it is a great way to validate your idea by getting it in front of as many people as possible, especially people who know your space well. Don’t be too precious with holding your idea close, getting feedback is a great way to make sure that people actually share your belief in the idea.
3. To attract investors
By far the most important reason (unless you fund your own idea) for a well-formulated business plan is to help attract investors. The plan will answer investors’ questions such as: Is there a demand for this product/service? What are the financial forecasts? How and when will they see their return on investment?
The content of the business plan can very easily be turned into a solid IM, (Investor Memorandum) which is expected by investors as a leave behind after you pitch your idea to them. An IM is a much more engaging way for a potential investor to understand your business. As they get pitched many ideas daily, leaving a great first impression and engaging IM will help you stand out from the bunch.
4. It helps to share your strategy, priorities and specific action points with someone objective
Your life goes by so quickly, as do all the ideas in your head. Sharing your business plan with a mentor, business partner or trusted advisor or friend will give you an opportunity to share ALL of those thoughts and ideas and work out which is viable.
Having a business plan is critical, even though your plan may change on a daily basis. Without having a true north, businesses can get lost very easily and very commonly won’t recover. By going through the process, you give your business a better chance at being able to survive as you will have properly established the problem you are solving, the way you are entering the market and how you will mitigate future risks.