In my blogs, I’ve often written that doing great business has a lot to do with hard work and laying a solid foundation. As Thomas Edison (the founder of General Electric) said, “Genius is 1% inspiration and 99% perspiration.” And no where is this fact better demonstrated than in the need for a solid business plan. So, now we’re going to go right back – back to the beginning, to the moment just after the “big bang” (ie your awesome business idea). Before you create your shareholders’ agreement, before you create your terms of business, before you sign that confidentiality agreement or letter of intent with a potential business partner – before all of this, you need a business plan.
You’ve had your eureka moment – now you need to do some work! Think of it this way – if you were building a house, you wouldn’t just pitch up in field and start laying a few bricks, would you? In the same way, when you’re starting your business, you need to lay the foundations and create a roadmap for your business with a business plan.
It all sounds a bit scary, but we at Rocket Lawyer don’t believe business plans need to be the length of a thesis or take you months holed up in a library to write. Follow our simple interview to create a straightforward business plan that will help set you on the right track to growing your business with foresight and consideration.
So, why do you need a business plan? Well, of course, one of the most important reasons is to help secure funding for your business. Potential investors, or your local bank, will expect to see a carefully thought out business plan before they agree to fund or invest in your business. Research has found that start-ups with a business plan raise twice as much capital as those without a business plan in the first twelve months. Some people will tell you that you don’t need a business plan to get funding, or claim that the concept of a business plan is defunct – but they’re just plain wrong! Any business, at any stage, needs planning and it’s essential for a new business venture.
It’s not all about the money. A carefully thought out business plan will help in other ways. It’ll help you take a step back and look long and hard at your business concept – does it really have legs? Do the figures stack up? How are you actually going to do this? A business plan helps test the feasibility of your big idea.
A business plan will also help ensure that your team are on the same page – everyone can have input into the business plan and, as we all know, two heads are usually better than one.
So – go on, bite the bullet. Read our guide to Writing an effective business plan to get you started and then follow our interview to create your business plan. There’s loads of great free help and guidance out there. You’ll need to do your research and homework first, but it’ll pay off in the end when you land that key investment and give your business the best possible chance of success.