The Importance of writing a Business plan for start-ups

For any budding entrepreneur or anyone else who seriously wants to start a business, business plans are a must. Even if you have twenty years’ experience in an industry and you know your business inside out, a business plan is still a necessity.

Why?

A professionally written business plan helps focus the mind of the founder on areas of the business that otherwise might be taken for granted - areas such as the business’s legal constraints and requirements. This area was ignored or at least poorly-executed in one of my projects and I paid very dearly for it. The result was that I failed to get the project off the ground after 18 months’ hard work - just because I hadn’t implemented all the legal requirements properly. The lesson is to always review the legal implications of your business project before you start - or be willing to spend money on a solicitor or an attorney to get all the legal issues right.

Writing your business plan will force you to research your competitors in more detail. By actually looking into their published accounts rather than just depending on what other experts have said; by having real facts to support your write-up you’ll add considerably to your business plan’s credibility.

The writing of your business plan will highlight your business’s strengths and weaknesses and indicate to you the type of people you need to ensure you bring your project to life. The right team is crucial to its success.

The writing of financial forecasting within your business plan should indicate the best ‘guesstimate’ of the funding your business will need.

With a well-written business plan, a great team around you and some evidence of a prototype or your business in its start-up phase of operation, the chances of receiving funding should be considerably enhanced, if not guaranteed.

Having a business plan does not mean that your business cannot fail - but not having one definitely increases your chance of failure. By having one at the outset you can adapt better, have a better chance of raising funds, have more chance of bringing your plans to fruition - and ultimately a far greater chance of succeeding.

It is too easy to overlook the importance of a business plan when you have the money and don’t need funding from VCs or business ‘Angels’. Don’t succumb to the temptation to do without. At the very least, pay someone to do it for you!