Why Every Company Needs a Business Plan

Just as with many things in life, a good plan helps keep things on course. That’s the point of a business plan. Employees, investors, and owners all need to know why they are involved with your company and where their future is heading with it. There are a few reasons why every company needs a business plan. Let’s look at what those are.

Direction and Goals

For a company to thrive and grow, clear direction and well-defined goals are necessary. Why did you start the company? Why do you believe in it? What’s the ultimate goal, and how will you get there? These are questions to answer in the business plan.

The Investors

The business plan is for the owner, so they know their why and how. However, it’s just as much for those considering investing their own money into a company created by the owner. When seeking investors, they have a right to know—and really, must know—where this company is headed and exactly how you’ll all get there.

Don’t head into a meeting with investors and expect to make a deal when there is no plan in place. Be prepared with a business plan.

The Employees

Motivation for employees stems from believing in who they work for and why they trust that it’s the best company for them. Employees are the number one reason why every company needs a business plan. The business plan should be recognized and discussed regularly at meetings for encouragement and motivation.

The Owner

The business plan is created by the owner and for the owner, even though it is of course needed for understanding and direction for all involved. As the owner of a company, how will you get off the ground with no direction? You’ve got to see the big picture and take small steps to get there. Those steps are laid out in the business plan. Ask yourself a few questions when creating the plan, such as:

  1. Where will employees work? Is an office necessary? Remote work is extremely common now and is an effective method for happy employees and a productive workforce. But will that type of flexibility work in your industry?
  2. Do you want to grow and expand quickly, and if so, how will you make that happen? Or is your goal to remain small and focused?
  3. Can you begin without investors? If not, make part of the business plan clear for investors so they see why it’s a worthwhile cause.

Brainstorm more questions for yourself and answer each one honestly. Then, you can elaborate and turn each section into your plan. Remember that plans can change and as a business owner, and that it’s essential to go with the flow and admit when a part of the plan no longer works. It probably means things are growing and changing, and that’s a good thing.

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Written by Emma Radebaugh

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