Business planning is crucial for both the growth and survival of the business. Some of the most successful entrepreneurs in the world will tell you, “If it is not written, it is not real.” Most successful businesses in the world have had business plans even before they started. Business plans are crucial in addressing all the central components of doing business. Ideally, business plans must be made before starting the business.
What are the main reasons for having a business plan?
Essentially all new businesses might require funding at some stage. A business plan is one of the best tools to get you financing from investors around the world. The plan for your business is what will speak to your financiers. You might require additional financing for your new business at some stage. Business planning will be used by banks and other financial bodies willing to fund you, to study the viability of the business. It should indicate the expected returns after a certain period and how you will achieve it.
The second use of a business plan is to determine if all required components of starting a business have been considered. Most entrepreneurs end up regretting later when they miss out on crucial matters.
A business plan addresses all the central components of starting a business. It is a must for all entrepreneurs to consider what they are offering, how they are offering it and to whom they are offering it. Even if you have everything in your head, having it written down in clear ways is crucial for clarity reasons. Keeping a business plan in your mind has the following effects:
- There is the likeliness of forgetting things
- One can revisit ideas that were found not to work and dismissed.
- There is the likeliness of remembering things incorrectly or very modified.
- You can misconstrue thoughts that were dismissed at some stage.
Most businesses that work without business plans are sometimes forced to have one when a significant change in the economy takes place. Even businesses with plans are sometimes forced to revise them to suit the current economic situations. Every plan must have the answers to the following questions:
- What do I want to accomplish with my business?
- What do I need to work with?
- How have I performed in the past?
- What is required of me in the future?
- What can I do now?
- How will I do it?
- Is it working?
The plan will act as a vehicle for communicating with the business managers, staff members, and the investors. Business planning helps identify and solve problems early before they get worse. Plans capture the big picture of the company making them better prepared for any opportunities or crisis in future.
Three main elements every business plan must have, include strategies, financial projections, and actions. Analyze your market, what your competitor does and your marketing strategy. What is the impact of your business on the economy, community, technology and regulatory factors? Do a feasibility study to learn the weaknesses, strengths, and opportunities of the business.
Business planning can be modified with time, based on what you have learned. Such planning will guide you through all your vision as you aim to get to the top and reap the financial benefits of proper planning.
When planning a business adventure, the most important aspect to get right is the legal entity.
- Should you incorporate?
- What kind of corporation?
- Do you need a buy/sell agreement?
- If you die, who will get your portion?
- If your partner dies, who will you be in business with then?
This is where you need to seek the counsel of a business law attorney. An attorney can guide you through the complex issues of incorporation, LLC, or whatever entity works best for your particular business. Don’t skimp on this part of your business plan. It could mean the difference between a long profitable business adventure, or ending up losing everything you worked so hard to build.
Call the Law Offices of Bj Richardson today to discuss your business law planning needs.
