Why Every Entrepreneur Needs a Business Plan + 5 Tips to Write One

Writing a business plan can be tricky and time-consuming, but it’s a crucial step if you’re starting a new business.

Not only is a business plan helpful if you’re looking for investors, but it can also be a fantastic resource to help guide and remind you of your longer term business goals.

What’s that saying? Those who fail to plan, plan to fail.

Here are five awesome tips to help you create an efficient business plan that meets your needs

Make sure your business is viable

Before you start writing your business plan, you need to make sure your business idea or product is actually desirable to your intended customer base.

Many entrepreneurs come up with a great idea without stopping to think if they are solving an actual problem for a group of people.

You don’t want to spend months or even a year working on developing a business or product idea only to find out nobody cares or even wants it.

You’ll quickly find out just by talking to a few dozen people if your business idea or product is a hit or a miss. This customer validation work may seem like extra effort, however it will save you potentially hundreds of hours in the future.

After doing this bit of research, you’ll have the clarity you need to write your business plan.

Consider your audience

So what’s the first step in actually writing your business plan?

Ask yourself who you are making this plan for. There are usually two answers – either to fit your own needs, or you’re writing it for investors or partners.

It’s important to recognise when someone wants a business plan for their own needs.

This type of plan tends to be less reliant on outside data, functioning mostly to set into motion the actions needed to get the business off paper, and operating.

However, if you’re making your business plan for investors or partners, it should be very analytical, and include a lot of competitive and market research, with money-asks clearly defined and term sheets as detailed as possible.

Be flexible

Business plans are important, but it’s also important to remember that not everything will go according to plan. That’s why you need to keep your business plan flexible.

Many people get too hung up on a business plan, and it slows them down. It doesn’t have to be perfect. Flexibility is important.

Think about timing

When you’re creating your business plan, you also have to think about the time it will take you to reach your goals.

For example, How long can you and any people on your team, commit yourselves to full-time work on the business for free.

Once you have that time frame, the second most important question is, “Is that enough time, conservatively, to get your business to a place where it can sustain your ongoing commitment?”

From there, you can figure out what goals you need to achieve and how to achieve them.

Make it visual

A great way to simplify your business plan, both for yourself, your business accountant and your investors, is to make it more visual.

Sometimes, people get too hung up on trying to explain their business model or cost assumptions in words, when a simple table, pie chart or flow chart can do wonders.

Investors spend countless hours reading business plans, and if you use a chart that makes it simple and easy for them to understand what you do, you’re significantly more likely to hear from them.

You can learn more about writing a good business plan in this article on Entrepreneur.com

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