When starting a small or home-based business, it’s easy to tell yourself that you are too simple or too small to need a business plan. If that’s you, you are not alone. Washington State University conducted a study showing that a full 27% of small businesses have never had a business plan.
The fact is, however, that it’s just as important for your small business to have a plan as it is for the mega-box-retailer down the street. In fact, the study showed that 64% of businesses with a business plan subsequently grew their business, where only 43% of those without a business plan could say the same.
The reasons are many, but having a business plan is key if you are looking for investors, applying for a loan or making improvements to your existing business. In fact, anyone looking to have a financial interest in your business (such as your banker) will want to know that you have a plan to take your business in the right direction. Owners with a business plan receive funding at twice the rate of owners without a plan (36% vs 18%) according to the study.
Even if you don’t expect to seek financing for your business, it’s still good to have a plan in place. A business plan provides you with a clear vision of your purpose and goals, and can help remind you what you envisioned for your company.
Creating a business plan isn’t difficult, but there are a few key pieces of information you’ll want to include to make your business plan effective.
Come back next week to find out what you really need to create an effective business plan! Join in the conversation by commenting below, or message us on Facebook or Twitter!