by Doreen Martel

Created on: September 24, 2011

While the perception is that unless you need financing you do not need a business plan, there is plenty of evidence to suggest that a business plan is essential to success.  Here are some of the reasons why entrepreneurs of all sizes have found that having a business plan helps them find greater success in business.

Focus is improved

Comprehensive and well written business plans can help keep a business owner more focused. Business plans provide a road map for success when written and used properly. Business plans should contain specific goals and milestones and when these are adhered to, the entrepreneur is better focused.

Fewer surprises

When an entrepreneur writes a comprehensive business plan, they are less prone to having things sneak out of nowhere. For example, if a business plan includes information on competitors, then a new business owner will not be surprised to discover that they have strong competition in their chosen market.

Keeping finances on track

When creating the financial projections for a company, all financial matters regardless of how big or small should be included. These projections allow an entrepreneur to review their original financial plan and determine if they are getting off track.  This information can help prevent overspending (or underspending) on crucial aspects of a business.

Mission and goals

When an entrepreneur gets caught up in the day to day operation of a business, it is easy to lose track of why the business was started initially.  Business plans that contain a well thought out mission statement and set of goals can help an entrepreneur renew their commitment to their business. This renewed commitment can result in a new enthusiasm that can help spur innovation and growth.

Need of capital infusion

One of the challenges that many small business owners face is the need for additional capital after a business is up and running. One reason that businesses fail is often a lack of proper financing. Business owners who were smart about creating a business plan even when they did not need financing have all of the basics ready to evaluate for possible financing. This means that they are less likely to fail due to funding shortfalls.

Goals, financing and focus are all factors that play a role in business success. Business plans help an entrepreneur revisit their original plans, help keep them focused and make sure that the business thrives. Finding long-term business success means proper planning early during the formation of a business. Business plans are essential to success of all businesses regardless of their size.

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