A startup, though small initially, is a complete business in itself and should follow all the required steps which any other business shall follow. A business plan is an integral part of every business whether big, small, an established old business or even a startup.
It is something that gives a foundation to judge for a corrective action to be taken if things are not going as was expected. Further, it is used as an important tool by an entrepreneur in:
Resource Allocation – Fuller utilization of available time, energy and money is possible only with a sound strategy.
Funding – Increases the chances of getting good funding as a business plan gives a future forecast of the business growth and makes it easier for an investor to calculate the risk involved.
Getting Loan – A business plan gives confidence to the banks and financial institutes over the business capability to pay its interest and repayments on time.
Key Employees and Partners – Easily get aware of the long term goals and strategies of the business to decide their terms accordingly and get surety of the bright future prospect.
However, while designing a business plan it is quite essential to ensure that it should be thoughtful and truthful without any unachievable high projections.
A business plan should always be in writing, as a written plan highly increases the chances of it being followed. The fact that at initial stages an entrepreneur is too busy in getting the customers shall not be a plea for not writing down the business plan.
Also, It should be as simple and clean as possible to make it easily communicable and understandable for business vendors, partners, key employees and investors to give a peek into the logical thinking and vision of an entrepreneur.