You can have an incredible, innovative business idea, but it’s difficult to build a thriving, successful company without a business plan.
At its core, a business plan is your business story—a guide that outlines your business goals, including how and when you plan to achieve them. Many questions about your business are answered in a business plan:
- Who are the people of the organization?
- Who are your customers?
- Who are your competitors?
- What is the role of your company?
- What products are you selling or what services are you offering?
- When do you plan to open for business?
- How is your business different from others in the industry?
- Why do you think you will be successful?
- Do you require money to roll out your business?
It can take up to a month of hard work, time, energy and commitment to write your business plan, but it’s critical to your success. Here are the top reasons why a business plan is so important.
It Tests the Viability of Your Idea
A business plan should test the viability of your business idea. You don’t want to sink thousands of your hard-earned dollars or borrowed money into a business that’s only ever going to cover your overhead costs. Pay attention to profit margins, and be realistic about your costs and revenue potential. That’s not to say you should expect your business to drive a profit right away—many ventures are in the red for a year or more—but your business plan should outline the market for your product or service, revenue goals and profit projections.
It Provides Vision, Focus and Action Steps
A strong business plan should identify the who, what, where, when, why and how of your business. If you put in the time to thoroughly complete this exercise, you’ll end up with a strong vision and focus for your business, as well as action steps to guide you. That plan will help you stay on track as your business grows.
It Sets You Up for Success
A contractor wouldn’t build a home without architectural plans—it would quickly lead to costly errors, delays and confusion and the home would likely never be completed. So why would you attempt to build a business without a plan? A strong business plan will guide your actions, help you make informed decisions and increasing your chances of success.
It Helps You Tell Your Story
When you’re approaching potential lenders and partners, you’ll need to know your business story inside and out. They will have questions and you need to have most of the answers (no one has them all!). A business plan provides key details that potential lenders and partners may want to know and it also demonstrates that you’re prepared, you’ve put in the effort and your confidence in your idea is informed.
The ACCES Employment Entrepreneurship Connections program is designed for newcomers who plan to start a business in Canada. If you have owned or operated a business outside Canada, this innovative and informative program could help you use that experience in the Canadian market.