Are you planning on starting a business? Creating a detailed business plan for your organization is important if you are planning on raising capital while taking on a lot of risk – such as leaving a job, raising a family, or investing in your savings.
A business plan is a blueprint for the business. You wouldn’t run over to an empty lot and just start nailing pieces of wood together if you wanted to build a house. Starting a business without a business plan is just as unwise. Your business plan will change over time as the business grows, and you may even need multiple business plans as its objectives change.
1. To avoid making big mistakes
The last thing you want to do is work on your start-up for an entire year, only to realize your business was doomed to fail from the beginning. Many entrepreneurs learn the hard way when they take on partners with the wrong resources and skills, don’t have a feasible way to make money, or didn’t set aside enough capital to achieve their goals. Tailored business agreements that establish the rights between partners can help ensure that you are going down the right path.
2. To counterbalance your emotions
Throughout your experience, you will be so passionate about your ideas to the point that you lose sight of reality. You will also be overwhelmed with exhaustion, fear, or doubt. Having a business plan lets you step back and take an objective look at what you are doing, what you are still trying to figure out, and what you know for a fact.
3. To ensure that everyone is on the same page
Most likely, you are not building a business by yourself. You can launch faster, smarter, and with less need to compensate employees or suppliers if you have partners. Establishing the rights between parties through legal documents will help lead everyone involved in the same direction.
4. To develop a game plan
Execution is everything when it comes to starting a company. You need to make sure that you set the business priorities in advance, establish goals, and measure its performance. In your business plan, identify the key questions that your business should answer such as, “What exactly are the consumers looking for?”, “Will they purchase your product?”, “How much are they willing to pay for your product?” A business plan will help you stay ahead of these things.
5. To raise money
If you raise or borrow capital, even from your loved ones, you will need to communicate your ambitions in a clear and compelling way. A great business plan will help you do just that.
Are you an entrepreneur that needs guidance in business planning, business agreements, or legal documents? Our firm has experience handling business formation needs, whether for entrepreneurs engaging in first-time business ventures, a seasoned business professional, or small businesses considering reorganization. We can offer advice for entity selection and form the appropriate business entity.
Click here to get in touch our business law attorneys at Hunsberger Dunn LLP today!