7 Reasons Why It’s Worth Your Time To Write A Business Plan

I wrote an article here last month called Start A Business: 63 Things To Do In Your First 100 Days. Number 5 on the list was “Finish your business plan.” In that article, I said that writing a business plan is critical. Someone sent me a tweet soon after that article was published and asked me why it was critical. I hope this article will explain.

I’ve been involved with a lot of businesses over the years. One thing I can say with absolute certainty is the ones that had a written business plan have always been more successful than the ones without one.

With that being said, I agree with what Deborah Sweeney wrote in 5 Questions to Ask Yourself When Putting Together a Business Plan. She pointed out that being too detailed in your initial business plan won’t give you enough space to grow. This may be the reason why some people think it’s not worthwhile.

It’s important to allow yourself enough flexibility to change and adapt to your market as necessary. In the beginning, you cannot predict all the bumps in the road, so give yourself room to update your business plan annually. There’s nothing wrong with changing your business plan along your journey as needed.

If you are serious about your new business, I highly recommend that you don’t skip this step. It’s important to put together a short, written (not just in your head) business plan from the beginning. Here are some reasons why it’s worth your time to do this.

1. To Increase Your Chance Of Success

I’ve talked about the famous Harvard ‘written goals’ study many times in my blog posts. You can Google it to get the specifics, but the bottom line is, Harvard determined that putting goals in writing affects our ability and determination to achieve them.

Written goals allow us to hyper-focus on reaching them in a way that non-written goals cannot. It has something to do with the way our brains work. The interesting thing is, only a very small percentage of people actually write down their goals.

A business plan is a way to put your business goals for the next 2 – 5 years in writing. When you look at it from that perspective, I’m sure you will start to see the value in creating one.

2. To Secure Financing & Attract Investors

In order to secure financing and attract investors, you have to be able to provide insightful, concise, compelling information about your business in a business plan format.

According to Inc., “startups with a business plan raised twice as much capital as those without a business plan within the first 12 months.“

3. To Gather Crucial Info About The Market & Your Competitors

You think you know your market and competitors, right? Once you take the time to complete a real market analysis, you’ll have more new information than you can even imagine right now.

This information might even give you new insight about the feasibility of your business. In my opinion, this is one of the most important parts of a business plan.

4. To Provide Yourself With Direction So You Don’t Just ‘Wing It’

Like I mentioned in the beginning, I’ve tried it both ways. I’ve started businesses with a business plan, and other times, it’s all kind of fallen into my lap and evolved along the way, with no business plan.

I can’t stress to you how much easier it is to be an entrepreneur if you have a roadmap. Your business plan will help you decide your monthly goals, which can be broken down into weekly and daily goals. It is important information that you won’t have if you don’t complete a business plan.

5. To Allow You To Gauge Your Success In The Moments Filled With Doubt

Being an entrepreneur isn’t always easy. Even though my business has been successful for over a decade, I still wake up some mornings in a panic, wondering if I’m on the right track.

In those moments, it’s time to pull out your business plan. Print it and hold it in your hand. Read it, and celebrate the progress you’ve made so far. It’s one of the fastest ways to melt your doubts and get back to working with a smile.

6. To Help You Make Day-To-Day Decisions

As an entrepreneur, you’ll most likely be making decisions every day that will affect the long-term health of your business. By using your business plan as a guide, you can keep from making big mistakes about how much rent you can afford, how many people you should hire, what your priorities should be, etc.

7. To Put Your Dream In Writing, Which Is One Step Closer To Reality

A business plan is a way to show others how serious you are about your success plan. It can be a tool to show your friends, family, colleagues, and others that this isn’t just a hobby for you. Creating a professional business plan puts you one step closer to making your dream a reality.

To make this process easier, you can even use a business plan app like enloop (free).

If you are ready to get started on your own business plan, I recommend clicking over to Business Plans: A Step-by-Step Guide and Create Your Business Plan.

Keep it short, simple, and tailored for your audience (potential investors, banks, potential partners, friends, family, or even just for you). Good luck!