A business plan—do you really need one? Is it worth the time and money spent on it? Can’t you just wing it without doing any planning?

Good inquiries. Here is all the information you require.

1. If you’re looking for a loan or investment, it’s crucial

They’re going to want to know that you have a firm grasp of your small business’s trajectory if you ask a bank, angel investor, or venture capitalist for money.

You don’t have to produce a 200-page report, but you will need something to provide your lender or investor that demonstrates that there is a market for the issue your company solves and includes your major financial statistics and forecasts.

Potential partners and backers of all stripes should find it easy to grasp your business model and finances thanks to your business plan. It’s much better if you can visualise the data using graphs and charts.

This is made simpler with LivePlan, which guides you through the process of setting up and forecasting your financials step-by-step without the use of complex spreadsheets. This way, you can present your figures with confidence knowing that you have assembled them correctly. Even if you’ve never created a plan before, it will automatically construct all the charts and graphs you need for you to do so.

2. Business planning has been shown to help you expand 30% more quickly.

The goal of writing a business plan isn’t to provide a forecast of your company’s future. What’s crucial is how you write your plan. You will have a better understanding of what you must do to succeed and reach your goals if you write down your strategy and consistently review it.

Business planning entails creating goals on a regular basis, monitoring your progress toward those goals, and adapting your company as you gain more insight into your clients.

You don’t have to believe what we say. According to studies, businesses that frequently plan and evaluate their performance really have a 30 percent higher rate of growth. Research demonstrates that businesses with plans actually experience faster growth. They are less likely to end up as one of those dreadful failure statistics or have cash flow problems that could force a company to close.

3. You’ll be assured when making significant financial decisions.

Determining when to expand to a new site, when to hire additional personnel, or whether you can finance a major purchase are some of the best problems you’ll face as your company expands.

These are significant financial decisions, and you’ll have better information to base them on if you routinely examine the estimates you outlined in your business plan.

4. You’re more likely to recognise serious cash flow issues at an early stage

Understanding and keeping an eye on your company’s cash flow is the flip side of those important expenditure decisions. One of the three important financial statements you’ll compile with your business plan is the cash flow statement. (Your income statement and balance sheet are the other two) (P&L).

You will be able to identify possible cash flow issues early and take action to prevent a cash crunch where you are unable to pay your invoices by routinely reviewing your cash flow statement as part of your business plan review.

5. A business plan helps you reduce risk

There is a lot you don’t know when you’re just getting started, including things like your target market, your rivals, and even operations.

When you established your company, as a business owner, you accepted some degree of uncertainty. However, there are many things you can do to lower your risk. Regularly creating and revising your company plan is a terrific method to identify your weak points—the errors, gaps, and presumptions you’ve made—and create backup plans.

When you integrate accounting programs like QuickBooks or Xero, LivePlan makes it simple to compare your actuals with your forecasts. To view your financial success, LivePlan automatically pulls in real-time actuals so you don’t have to manage spreadsheets—or worse, conduct human data entry.

Once you know what works and what doesn’t, you can effortlessly modify your forecasts and other aspects of your business (marketing, sales tactics, production, inventories).

6. It provides a strong framework for prioritization and strategic planning

A fantastic location to map how your sales and revenue targets align with your spending budget is in your business plan. You can ensure that you’re putting yourself in the best possible position for success by making a clear connection between the investments you’re making and the outcomes you want to see.

Having a team that is on the same page is easier when you have a business plan. You’ll be able to concisely describe how you envision getting from one place to another.

Your overall efficiency will increase if you can get your team to work together toward the same priorities. You want everyone on your team to comprehend the big picture and your more important objectives. From the start, you need their support, and as you advance, you want to make it simple to track and share your progress.

Everyone on your team will be more invested in achieving your goals if they understand how their individual contribution to the task affects the wider organization.

LivePlan generates easily understandable reports that you can distribute to your team to let them know how things are really going. Connecting the dots between the tactical work and the effect it has on your revenue allows everyone to plan and prioritize

7. You’ll be able to create realistic objectives and benchmarks

Every effective company strategy lists SMART objectives and benchmarks. SMART objectives are:

Specific, Measurable, Achievable, Relevant, Time-based

A business strategy is much less valuable if no objectives or milestones are included in it. Your team will be difficult to organize around the same priorities if you establish goals and milestones for your business and team that aren’t in line with the strategy you described in your business plan.

High-level milestones can be set using your business plan. After that, make goals that matter and use them to direct your sales and marketing tactics.

8. If you ever wish to sell, your company plan is a valuable asset

You might decide in the future that you want to sell your company or set yourself up for acquisition. You can argue for a higher valuation if you have a strong business plan. If it’s simple for a buyer to comprehend your business strategy, your target market, and your overall potential for growth and scaling, your company is probably worth more to them.

Getting started

Beyond just planning and setting goals, a business plan is crucial and should be reviewed frequently. It’s important to just begin going. You may not find it to be as difficult as you think. It doesn’t have to be a formal business plan with 200 pages, or even 20 pages, and you don’t have to work on it for months.

A business plan might potentially be written in less than an hour. And there are lots of tools at your disposal to make it simpler. Get a free sample business plan for ideas by downloading our free business plan template.

Check out LivePlan for step-by-step instructions, tutorials, and educational materials to support the creation of your business plan.

The dynamic template in LivePlan guides you through the planning process step-by-step. You will quickly transition from a template to a finished business plan thanks to intuitive fill-in-the-blank inputs, straightforward yet effective financial forecasting, and stunning business plans that wow investors.

The entire business planning process is made easier with LivePlan, which also makes it simpler to compare your plan to those of your competitors. LivePlan also helps you track your success as your firm expands.