Creating a new business can be quite stressful and fearful all at once. There are many questions to answer. What resources will you need, what is your vision, and how will you bring the vision to life?
There is a quote that I often think about when it comes to starting a business, and it states, “Make your vision so clear that your fears become irrelevant.”
So how can you make your vision become clear? What better way than writing it down in the form of a business plan!
Throughout my years in lending, I’ve found that our members often have goals in mind but need help achieving them. My favorite part of being an underwriter is helping our members better understand the lending process.
As a Business Loan Underwriter, I am often asked, “What do I need to do to get a business loan?”
One of those major items you need is a business plan.
Your business plan is ultimately a blueprint of your business. The quality of your business plan can determine if the business succeeds and whether not you are able to pursue financing or investing in the future.
It also brings all of your strategy and tactics together to show how you will run your business. A great, detailed business plan will make you look your best and show others that you are completely committed to achieving success.
Are you ready to take the step towards success? To help get you started, I’ve outlined four reasons why you need a business plan to be successful:
A Business Plan Brings Clarity
Creating a business plan can bring clarity to a business owner on how the business will be run and how they will accomplish goals. The business plan will define your business and should be clear, focused, and realistic.
If you’re willing to take the risk to create a business, you’ll want to succeed. A business plan can also help you become aware of your weaknesses so that you can know where you need to focus your time for improvement.
According to Forbes, people who write down a clear, vivid picture of their goals are almost 1.5 times more likely to achieve them.
Simply writing goals down isn’t enough when it comes to clarity! Your business plan should be reviewed monthly, quarterly, and yearly to ensure that the goals do not need to be revised and to ensure you are running your business the way you intended.
Running a business is a tall task, and the more details you write down, the easier it is to explain your business and what it is that you do.
Business Plans Help You Get Financing
In order to pursue financing, you must complete a detailed business plan. This is a requirement for almost all financial institutions!
Creating a detailed business plan that shares your vision will show lenders that you are serious about your business and can show how much work and dedication you have given to create the business.
You want the lender to review the documents and see that you have done the research and have the knowledge to create a successful business. As a lender, we look for a clear understanding of what type of business you are running, how it will operate, and how the business will be profitable.
We also want to see your passion for the business and how you will make it stand out from your competitors. Feel free to share information on your vision and the long term goals you have with your lender. We take pride in helping our business members achieve their goals and dreams.
Great Business Plans Get Great Investors
While not all business start out with investors, there are many that pursue investors once they have been in business for a few years.
Your initial business plan can show investors that you are well-organized and that you have achieved your goals. This can also be true if you plan on selling the business down the road.
The business plan will show how much of your own money you have invested in the business and how the business has performed compared to the initial projections.
Your Business Plan Helps Build Amazing Partnerships
Share highlighted sections of your business plan with any professionals or vendors you plan to partner with. This list can include accountants, attorneys, and service providers.
It’s very important that your accountant is aware of your business goals and strategies. They can help you with how your taxes will be handled to benefit you the most.
Attorneys can make sure to structure contracts to reflect the different strategies in the plan as well. You also want to share your mission and goal with service providers to ensure that their service standards align with yours.
Your Business Plan Leads Your Personal Goals
We have discussed the benefits of a business plan and how it is needed for lenders, investors, and partnerships, but there are a couple reasons it benefits the owner.
The business plan can be a great tool for owners and agents of the business to do a “personal reflection” of the business. The reflection will ensure that your vision and goals align with how the business is being run.
This also allows you to change or adapt your personal goals or strategies to continue your success. This reflection should be done throughout the year, during end-of-year wrap-up meetings, and in your first quarter strategy meetings.
The business plan can be updated as the business grows, employee structure changes, and any other changes happen. A successful, growing business will use the same business plan but will need to update the plan as growth happens, and this is especially true when it comes to your personal goals for success.
Now that you understand the importance of a business plan, you can start to craft your own. What’s stopping you from creating your business plan?
When I’m not hanging out with family, you can find me at an LSU baseball game or trying out new restaurants. I also enjoy spending time outdoors with my wife, my daughter, and our dog!