11 Reasons Why You Must Have a Business Plan

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11 Reasons Why You Must Have a Business Plan

In working with countless business owners over the years, I have found that every successful business has one thing in common — business plans.

The successful business owner not only understands the importance of planning but also updates their business plan regularly and uses it each month to achieve their business goals.

What is the importance of having a business plan, exactly? Former U.S. President Dwight D. Eisenhower, while serving as Supreme Commander of the Allied Forces during World War II, said it best:

“In preparing for battle I have always found that plans are useless, but planning is indispensable.”

While Eisenhower is being a little hyperbolic here, he’s right in that plans change all the time, and the plan we end up using weeks, months, or years down the road may be very different from the one that was initially created. The planning that is required in order to devise a plan, however, is essential.

The planning process causes us to think deeply about our business from multiple vantage points, and this preparation allows us to be flexible and adaptable once plans are forced to change.

Simply put, good companies plan. Profitable companies plan. Successful companies plan. If you don’t have a business plan, there’s no better time to create a plan than right now. Here are 11 of the top reasons why your business needs one!

1. To Grow an Existing Business

One of the most fundamental reasons for having a business plan is to grow your current business, of course! A business plan allows you to craft goals and allocate your company’s resources accordingly.

2. To Create a New Business, Branch, or Product Line

Whether you are starting a new business from scratch, opening a new location, or launching your latest product or service, a business plan keeps all of your thoughts, goals, and priorities in one place.

3. To Set and Follow Up on Objectives for Management

In order to lead effectively, your management team needs to be able to refer to a clear set of objectives. Having these objectives in writing conveys expectations and also allows you to follow up on specific goals.

4. To Get Employees on Board With Your Company Goals

Employees can often feel as if they are on the outside. By involving them in your company goals, however, you not only encourage a better output but also make the job more fulfilling for workers.

5. To Share Business Goals With Family

A business plan doesn’t need to remain within the four walls of your business. Share your business plan with your spouse, parents, and children, and allow your family members to keep you accountable along the journey.

6. To Hire New Employees

Does your business need more employees? Do you know which positions you need to hire? What are the duties that your new employees will perform? A business plan will help you navigate key hiring and training decisions.

7. To Decide Whether Or Not to Rent New Space

Are your current facilities adequate or do you need to add more space? Do you need to cut back on space? A well-developed business plan will indicate your specific building needs.

8. To Back Up a Business Loan Application

When applying for a business loan, most banks and investors will want to see that you have a business plan. Create your plan early on so that you’re prepared to borrow money when the time comes.

9. To Develop New Business Alliances

All profitable businesses require strong partnerships. By targeting certain types of businesses in your business plan and then sharing certain parts of your business plan with those companies, you can win them over and help them buy into your vision.

10. To Decide Whether You Need New Assets

Does your business need new assets? If so, how many do you need? A business plan will outline the different assets needed for your company and indicate whether you should buy or lease those assets.

11. To Make More Money

Finally, the most successful businesses have one thing in common: business plans. If you want to be more organized, more efficient — and most importantly — more profitable, a business plan is an absolute must. Start creating yours today!