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Writing a Business Plan: Why time is worth writing a Business Plan?


 Usually, business strategies provide comprehensive details that can help boost the chances of success of the organization, such as market forecasting, competitive analysis, customer segmentation, marketing, logistics and operating plans, cash flow forecast, and an overall roadmap to long-term growth.

You may not be convinced that all the time and effort required to prepare a plan is essential; if so, then the main advantages for both you and your business are here.

1. You will never be able to convey your vision for the company as successfully as a perfectly put together Business Plan, no matter how good a communicator you are. It offers a clear understanding of what you want to accomplish. It helps you to convey your ideas in a clearer way.

2. Business owners try to verbally sell their idea too many times and at the end of the interview with the bank the manager is none the wiser than he was at the beginning. The outcome of many of those requests, I think you can guess!

3. The Business Plan will help to convince both you and the Bank of the feasibility and viability of the project. Nothing like having all the facts in front of you to clarify the key issues.

4. There's no getting away from the fact that the business owner who plans ahead comes across as being more ambitious and more focused. A well-prepared Business Plan shows you have a vision and you know what you want.

5. With numerous ideas floating around in your mind, the pitfalls or the stumbling blocks to success are never so visible. A buzzing mind, full of ideas, rarely achieves clarity. The Business Plan forces you to put your ideas down in writing and in orderly fashion. The result of this could be that you are going in a completely different direction than you originally thought, or even abandoning your idea altogether. Not a lovely thought, but which one would you prefer? The loss of your hard capital or the opportunity to rethink your idea?

6. Every action you take has a consequence, and a plan helps to make these consequences much clearer. Being aware of the possible effect of your chosen direction allows you to plan ahead, making you better able to cope with whatever the world of self-employment might throw at you. This is one thing that "mental planning" would not have achieved.

7. Putting your thoughts on paper may make you realize that you need to do more research on the demand for your product or service. It might also point out that further investigation of the products or services of your competitor is needed. Additional research could help avoid a potentially costly mistake or even uncover a hidden advantage that you haven't seen before.

8. A plan is going to guide you on how much money you need to make an idea work. In your mind, you may have a rough figure of what you are going to have to commit, but until you make a Cash Flow Forecast, you may not realize that an overdraft limit will be required in addition to a loan for your equipment. If the mention of preparing the Cash Flow Forecast brings you out in a sweat, whose worry as later in the book I'm going to show you exactly how to do one thing.

9.The Business Plan is going to help you get funding. One of the main reasons for the banks' refusal to accept requests for loans is the lack of information to help them make informed decisions. If the manager doesn't have enough knowledge of your idea or business, he won't feel comfortable enough to support you. He's got to understand your business before he can say yes. Some time in the future, he may have to justify to his superiors why he lent you the money, so he needs as much information as he can to back up his decision. The Business Plan will make him feel much more at ease and more able to say yes.

10. By the time you have finished writing your Business Plan, you will have an overall understanding of your business; its strengths and weaknesses, the environment in which it operates, what could potentially go wrong, and what you can do to ensure your success. Doing your planning on the back of the envelope is not going to do that.

You should realize by now that it is essential to have a business plan; it could be the difference between success and the dreaded "f" word – failure! It's all about understanding the importance of planning ahead of time.


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