What are the benefits of writing a business plan?

Benefits of Having a Business Plan

Entrepreneurs often ask, "Why do I need a business plan?". Well, let's put it this way. Do you want a successful business? Because, writing a well-thought-out and organized business plan dramatically increases your odds of succeeding as an entrepreneur. Running or starting a business without a business plan is like walking through the dark without a flashlight. You can probably go a long way using just your senses and relying on basic instincts. But operating in such a manner leaves you wide open to the risk that something will get in your way (like a competitor) and you probably won't see it until it is too late. And just imagine all of the opportunities that are just waiting to be grasped - but without a flashlight, ah sorry - business plan, how will you see and take advantage of them?

The benefits of having a business plan include:

• Helping you to clarify your vision and deciding whether or not to forge ahead with the idea.

• Determining if your product and/or service has a sufficient market to support it and whether or not it will be profitable.

• Providing an estimate of your start-up costs and how much you'll need to invest or finance.

• Convincing investors and lenders to fund your business.

• Defining your target market (who your customers are or will be) and how to best reach them through strategic marketing actions or expanding market coverage or reach.

• Establishing or reevaluating your competitive position within the marketplace, by conducting a thorough analysis of the competition (finding out where your competitor's weaknesses are and how you can take advantage of them).

• Defining corporate objectives and programs to achieve those objectives.

• Helping your business make money from the start by developing effective operational strategies.

• Understanding the risks involved and anticipating potential problems so you that can solve them before they become disasters.

• Setting a value on a business for sale or for legal purposes.