Importance of Business Plan for Start-ups and Small Businesses
A well-drafted business plan is
an important tool because it gives entrepreneurs the ability to lay out their
goals and track their progress as their business begins to grow. Designing a
business plan should be the first thing done when starting a new business.
Business plans are also important for attracting investors so they can
determine if your business is on the right path and worth putting money into.
Due to COVID-19, businesses are experiencing major impacts no matter how established they are and are having to re-look at how they operate their business including re-visitation of their business plan.
It has become challenging for most businesses to keep their financial wheels turning during the lockdown period due to less turnover churn and the general uncertainty in the global financial environment.
Unfortunately, the impact on startups or small businesses can be way more brutal as they have less cash reserves and a smaller margin for managing sudden slumps. The ripple effect of this shutdown will have a key impact on India’s economy, as all business sectors get impacted resulting in low revenue generation due to an eventual halt/slump on the sale of products and services.
So, during such testing times, entrepreneurs will have to reshape a new set of rules to survive the slowdown caused by the impact of COVID-19.
Pros of effective Business Plan
1. Feasibility of the plan: A business plan will in reality help one to understand whether pursuing the opportunity is worth it or not without actually digging in it and ending up losing the two most essential resources like money and time.
2. A business plan acts as a blueprint: Business plans are often required when seeking funding from banks or Angel investors. You wouldn’t start construction on a new house without initial obtaining a blueprint of design from an architect! Your business plan acts as a blueprint for your business and keeps you on track. Also, it prevents us from making mistakes, which at the initial stages can be very harmful.
3. Helps to identify potential weakness: As the head already suggests, despite preventing us from making lethal errors, business plans can also locate inherent and unrealized loopholes. Further, through a business plan, one can likewise get possible assessments and inputs.
4. Raising capital: Having a business plan will make it simpler to raise funds as it will become very easy to communicate with the investors. It will give a detailed view of the business which will not only be advantageous for the aspirer yet additionally for the investors.
5. Chances of Success: By being able to assess factors such as the feasibility and the potential weaknesses, one can avoid the pitfalls thereby making progressive steps towards success. It builds the odds of accomplishment significantly.
A business plan is important as
it is the initial step and it is significant as it helps an organization to
fight with the start-up phase which usually decides the fate of an
organization. Further, it is another progression which insists the dedication
that one has towards one's goals.
In the event that you need to set
up a business, then it is better to have a business plan ready. Remember that a
business plan is significant for its success. Additionally, to fight with external
factors in the startup stage, the right plan will help you a lot. The appropriately
arranged steps will decide the fate of your business.