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Why do you need a business plan
If you’re going into business, you should have a business plan handy. Depending on the complexity of your business, it could be a simple “set up shop-get customers-earn profit” plan or a much more detailed breakdown of what your expenses and income is likely to be. Here are a few reasons why you should have a business plan.
1. It helps you avoid disasters mistakes
A good business plan would provide a practical, realistic look at the current state of your business, the milestones you need to reach over time and the goal you hope to achieve. If you want to, say, add a new product line to your business, a business plan would help you gauge if you can afford it and how it would affect your current state of functioning.
2. It helps keep a check on your passion
Most people go into buisness simply because they have some money with them and are passionate about something. However, without a business plan, you’d probably end up spending money on your vision of what you wanted your office to look like rather than on what is good on your business. At the very least, a business plan is like a roadmap and a budget plan merged into one.
3. It helps you raise capital
Investors, whether they are your family and friends or people looking for new startups to invest in, would need to know how you plan on using their money. A business plan would basically be a breakdown of the expenses that your business would incur during the startup phase, how much would it cost to keep it operational per month and what kind of returns on investment the investors can expect.
4. It helps you work towards a goal
When you have a business plan, you know what targets you need to achieve, what you need to do to get there and what kind of results you can realistically hope for.