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One very essential step to starting a business is having a business plan. Unfortunately, many persons go into business without having one. While for some cases the reason is that they don’t just know how to go about formulating a business plan, for most cases the reason is that they don’t know the importance.
 
A good percentage of business failures can be attributed to no business plan. Many people get a business idea and the next thing you see is goods that have been bought or an office space with office gadgets and one or two employees. This is the easiest way to fail. I have come across many people who are into one form of business or the other but if you ask them what a business plan looks like, they have no idea. Some wonder if it is even important. 
 

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Building a business without a plan is like building a house without a plan. You have nothing to guide you as you build on. You stand a great chance of building a house that you won’t want to live in.
 
As part of my goals to see more people get into business and succeed, I have decided to take out time to share with you on the importance of having a business plan for your business and also how to go about it. In this post, I focus on seven reasons why you need a business plan for your business. They are:

 1.    A Business Plan Helps You Get Real & Objective

It is easy to be emotional about starting a business. When you have a good business idea, the tendency is to get so excited such that you don’t want to waste any time.
 
Writing a business plan gets you to sit down and count the cost. It gets you to go out and ask questions and get the real picture of things. In writing a business plan, you need financial figures; you need realistic projections, you need to evaluate risks, you need to check out potential competitions, and so on, and with all these, you cannot afford to be superficial in your planning. You must get objective and real. In the course of getting the business plan straight, you can better decide if to go on with the business or not.
 

2.    A Business Plan Helps Test Your Level of Preparedness

Without a business plan, you are likely to assume that you are well prepared to start up the business. But, in the course of formulating the plan and getting real and objective, you can see how prepared you are to set up the business.
 
Your business plan will reveal to you how much resources (men, money, machines, materials, information, space, etc.) you need for a start and it will become very clear to you how prepared you are to start. After having a detail business plan, you will be at a good position to make a decision on whether to continue with setting up the business or to prepare harder.
 

3.    A Business Plan Gives You Direction

A business plan is like a compass to your business. Once your business is set up, your business plan becomes the reference center. You will notice that there will always be reasons for you to visit it often in order to get direction on which way to go.
 
A business plan has the business vision, objectives, projections for future growth and expansion and so on. Thus in running the business, you will always have to refer to it for guidance. It will tell you where you are and what next steps you need to take. It will give you a clear way forward and spare you the error of making decisions in the dark.
 

4.    A Business Plan Helps You Monitor Your Progress

The only way you can really check on your level of progress at every point in the growth of your business, is by visiting your business plan. When you have a business plan, you will always know how much you have done in accomplishing your goals and how much is left. From there, you can easily know what next steps to take. A business plan serves as a monitor.
 

5.    A Business Plan Helps Evaluate Your Performance

It is easy to stamp your chest and go to sleep thinking you are doing so well, when you don’t have a business plan. You think you are doing so well because you are making profit.
 
You can only objectively evaluate your performance by working with a business plan. A business plan will help you to match plan to progress and see how successful you are already, and what chances for greater success, you have. With a business plan, no one needs to tell you if you are succeeding. It is clear, very clear.
 

6.    A Business Plan Helps You To Secure Business Capital

This is one of the most obvious reasons why people do business plans. When you want to begin a business, one of your concerns will be how to raise the start-up capital. For some persons, they go to family members and friends, for others, they apply for sponsorship from potential sponsors; others still open the doors for investors to come in. Whichever the case, no one will put in money into something that is not convincing enough and stand high chances of succeeding.
 
Before people plunge money into a business either as sponsors, investors or ties, they want to know that the one at the helm knows where he is going and that place is beautiful. This can only be when there is a clear business plan that projects so. In seeking for capital, you will need your business plan.
 

7.    A Business Plan Helps You Understand the Market

In order to write a comprehensive business plan, you must spend some time to do enough research on the business. You will want to know the potential customers and competitors, the viability of the business, the amount of profit to expect, the potential set-backs to guard against, and so on. As you seek to get a deep understanding of these things, you will be getting insight to the market.
 
A business plan is a sure way to start your business and be 40% sure that it will succeed. However, setting a business plan is one thing and following it is another. It is more important to follow your plan than just having one. When you formulate a business plan and follow it, you stand up to a 70% chance to succeed.
 
I hope with these, you can find reason to go on and start up with your business plan before setting up your business. I recommend that you read my post titled, “Simple Tips on Setting a Business Plan”, in order to be briefed on how to go about this process.
 
Please make comments below.
 

by Kadzem Claude

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7 Comments

  • Anonymous October 28, 2013

    Good day Sir. Thank you for the information you are passing to Nigerians. Please I want to make a request. Can you do a post on starting a wholesale cosmetic shop and particularly where to source products from. Thanks.

  • Darlinton Omeh October 28, 2013

    You are welcomed. Stay tuned on Wealth Result. As soon as we have enough information on that, we will do a post.

  • Akinnifesi israel April 19, 2016

    I am recently required to describe my bread baking business idea. Does it also mean business plan? Either way pls can u provide sample of it.
    Thanks

  • Akinnifesi israel April 19, 2016

    I am recently required to describe my bread baking business idea. Does it also mean business plan? Either way. I need a sample

  • adekoodada October 17, 2016

    great job sir, can l get a copy/ a draft of a business plan for a small scale business i.e. selling of provisions in a store.

    thanks
    Adekunle

  • Shamraf March 21, 2017

    Nice 1, I need a business plan for a medium size bread making business. How do I get that.

  • Darlington February 26, 2018

    Thank you Sir for the information
    Please can you help with a sample of business plan.

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