Do you own a blog that you make money with (or wish you were)?
Do you sell your services to others online?
Do you want to cash in on selling digital products?
All of these things are considered home businesses (or at least if home is wherever your laptop is). But most people make the mistake of not treating these things like a business.
Which means that they never really take the time to write out an actual business plan.
Maybe it seems “too real” for a call business like yours. Or you simply have no idea that it’s a thing let alone where to begin with one.
Or maybe your business started as an accident. If you got this far without a business plan, then that means you don’t really need one, right?
Wrong. 100% wrong!
Especially if you want to grow. And let’s be honest, who doesn’t want their business to grow?
It’s a big mistake to skip this crucial step in creating a business, as a business plan can greatly increase your chances of success.
5 Reasons Why You Need a Business Plan
Even if you’ve already started your business, it’s never too late to create a plan. You should review and modify your business plan as your business grows, anyway (once or twice a year works fine).
Are you convinced yet? If so, you can step over to my post on how to create a simplified business plan. This will make the writing process easier for your first business plan.
If you still don’t really get why this is so important, keep reading. I’m going to drop 5 reasons why every business, especially yours, needs to put a business plan into writing.
Directions for the future
A business plan maps out your future. If you’ve decided you’re ready to start a business, your first step should be to write out your plans for that business. This includes what you want to do and where you see your business going in the future.
You’ve probably heard the saying, “If you fail to plan, you plan to fail.” That”s also true when it comes to your business.
While you may see some success while just winging it in the beginning, it comes faster and easier with planning. The more planning you do, the greater success you will see in the future.
Does the thought of writing a business plan trigger your anxiety? Do you feel like business plans are only for “big businesses?” Trust me, I totally understand. And creating a small business plan was my semester assignment for Business 101. I should know better right? But psychologically, it’s difficult to sit down and create a […]
Online businesses are the cheapest to start, but depending on what your business is, you may need some extra capital as you grow. Especially if work with physical products or need to pay employees or contractors.
If you decide to take your home business to the next level, a business plan can help you secure financing. A financial institution will want to see, in writing, the reasons that they should loan you money.
Simply walking in and telling them why you know you’ll be a success isn’t good enough.
However, if you can hand a lender a document that states…
- your business idea,
- your business goals,
- a list of steps you plan to take in order to reach your goals, and
- your estimated earnings,
…you will be seen as a professional and the lender will take you more seriously.
A plan of action
Your business plan will also help you determine what actions you need to take to move forward with your business. An action plan consists of the steps you plan on taking in order to achieve your business goals.
This is another task that people usually sidestep. Instead of “just kind of knowing” or “having the ideas in your head”, you should take the time to put them on paper.
The reason this part of your business plan is so important is because it literally walks you from point A to point B.
While your business plan serves a map, your action plan is the turn-by-turn GPS directions.
A plan for learning
Your business plan will also help you figure out what you don’t know you need yet. It forces you to think about all the necessary things to create a successful business. This means you have to find a way to deal with the things you don’t know, too.
For example, let’s say you have no clue how you’re going to market your products and services. You should first plan to figure out what options are available for marketing and then learn how to use them for your business.
Will you hire someone? As a solopreneur you probably won’t, at least not right away, so you’ll have to learn how to do these things yourself.
Your business plan will show you what you need to learn and when you need to learn it. You can purchase courses that will actually make a big impact on your business at the right time.
This keeps you from spending money on something that may be good to have but isn’t quite right for where you currently are in business.
A business plan and a comfort plan
Having the support of your spouse, other family members, and your friends can really motivate you and help you find success.
There’s nothing worse than having an idea and then not having the people who you thought would support you on board. It may be easy to ignore your friends, but an unsupportive spouse can really hurt—both your feelings and your chances of success.
Having a business plan can help your spouse realize your business idea is more than just a hobby, especially if your spouse is skeptical. They can see that you’re serious and might become more helpful and more encouraging.
You’ll be able to make decisions based on your plan, which is useful when you want to make an investment. It won’t be an impulse buy; it’s something that directly fits into your business plan.
When you have a clear reason and plan for a purchase, your spouse is more likely to be on board.
Recap: 5 Reasons Why You Need a Business Plan
Here are those 5 reasons why business planning is necessary for you, even as a solopreneur:
- Gives directions for the future
- Creates a financial plan
- Creates a plan of action
- And a plan for learning
- Shows others that you’re serious
It may not be the sexiest thing you do for your business, but it is the most necessary. Whether you’re a blogger, freelancer, or just plan to promote affiliate products, having a plan will increase your chances of building a successful online business.
If writing a business plan seems overwhelming, I’ve outlined two simple business planning methods that will make writing your first plan easy.
Or if you prefer some step-by-step guidance, you can check out the Success Mindset Business Planner. This will guide you through the process of creating a goal-based success plan for a business that supports your dream life.
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