Thousands of new businesses are born every year. Market research and data from the World Bank show that new businesses are being registered at an incredible rate. Unfortunately, very few survived. According to the U.S. Bureau of Labor Statistics, about 20 percent of small businesses fail in their first year, and about 50 percent fail in their fifth year.
Other statistics show that business failure is very high. So why do so many businesses fail? In most studies, “lack of a business plan” is cited as one of the reasons for this.
It doesn’t matter whether you start with a good idea or a business with good products. You can only get so far without a strategy – a business plan. But a business plan is more than a strategy. A plan can help businesses find business challenges and respond quickly when they encounter problems.
What is a business plan?
The business plan can be defined as a guide for a company to operate and achieve its goals. More specifically, it is a document that outlines the purpose, goals and objectives of the business while creating a plan for the day to day activities of the business and its important activities such as marketing, finance, expansion.
For startups looking to raise capital to grow and scale, a good business plan can change the game. It gives investors the ability to tell the business will be profitable and gives a realistic expectation of how much and when it will be successful.
Advantages of Developing a Business Plan
Setting Goals and Measures: Proper planning helps businesses set realistic goals and take the time to complete them on time. This leads to long-term profitability.
Maximize Resource Allocation: A good business plan helps the company organize and allocate its resources effectively. Opening new offices, hiring new employees, changes in production, etc. provides insight into the consequences of actions.
Increase effectiveness: Planning is very effective in making content a reality. While every company’s business plan is different, a successful company’s plan can often provide good advice to start-ups and start-ups.
Support Decisions: Running a business involves many decisions: where to do business, where to buy, what to sell, what to pay – the parts list goes on.
Fix past mistakes: Helps businesses save time, money and resources when businesses create plans, by paying attention to past pressures and failures and what has worked for them and what hasn’t.
Types of Business Plan
The following is an explanation of some types of business plans.
Start-Up Plan: As the name suggests, it is a document describing the plan, structure and tactics of a new business. It describes the products and services that the company will produce, employee management and economic analysis of its products.
Feasibility Plan: The Feasibility Plan evaluates potential customers for the product or service to be produced. It was created by a company. It also predicts whether the business will make or lose money.
Growth Plan: This type of plan is created when the company decides to expand its product or model. It lays out simple steps and tips on how to grow indoors or out.
Operation plan: The operation plan is also known as the annual plan. This document outlines the day-to-day activities and strategies that the business must perform to achieve its goals.
Strategic Plan: This document supports the company’s internal strategy and is part of the strategic plan
Challenges in writing a strategic plan for the business
The importance of a business plan cannot be overemphasized Sufficient Yes, but a business plan Writing can be difficult. Here are some things to consider before starting a business:
Create a business plan to start your company, secure finances and attract investors.
Setting financial, demographic and success goals Goals are common topics when writing a business plan.
Some entrepreneurs find it difficult to write an interesting and informative business plan that is short enough to prove the viability of their business idea.
You can simplify your business plan by doing research, talking to experts and friends, working with business consultants.
