There are, in reality, three primary reasons you need to have a business plan. Publishers, and a certain number of consumers, like to see Top 10 lists, so I arbitrarily chose Top 8 Reasons, just to be different.

Gleaned from years of working with a variety of business in putting market strategies and business plans together, here are three of the main benefits to you, as a business owner, for having a business plan:

1) Risk Prevention. What? If you’ve been in business for any length of time, and paid for advertising to promote your business, can you quantify how much revenue that advertising has generated for your business? Spending ad dollars to reach potential consumers is a risky gamble that can be prevented with a little research, identification of your market, and an effective marketing strategy. These are all elements of your business plan.

Unfortunately, a majority of business owners fall prey to the “marketing consultants” who sell radio or TV time or space in a magazine or newspaper. Don’t get me wrong, they are all excellent media resources for conveying a message to consumers, but each one has a unique delivery system, targeted audience, and ability to be effective. That’s why you’ll hear the representative say, “There are no guarantees.”

However, if you know your target market and their preferred method of receiving advertising messages they will respond favorably to, your choices for advertising become much more simple. Your ratio of success and odds of increasing sales go up exponentially. That’s one way your plan helps you prevent risk… and lose money!

Another aspect of preventing risk that your plan provides is the development of strategies to handle a down economy or reduced demand for your product or unforeseen circumstances or market trends. When you take the time to think things through and put them into a plan, you create solutions to problems you may only envision happening. Better to do this in advance instead of waiting until it happens. You then know how to react and don’t have to waste time figuring out what to do. The plan goes into action without delay.

2) Management Tool. Yes. Operating a business requires sound management principles and effective managers. One of the key elements a bank or lending institution looks at in providing financing for a business is the strength of the management team. Strong managers are confident in making difficult decisions, and that is important to the bank. If payroll needs to be reduced, lenders like to know the decision will be made for the good of the company and its bottom line.

What management needs, therefore, is a management tool to provide guidance, determine strategies, and effect changes if necessary. This is where the business plan plays a vital role. With a well-defined budget, a pivotal element of a business plan, managers have a tool they can use every month to assess the company’s performance. If sales projections are less than expected, management can implement corrective actions to improve the results. If the plan is well thought out and written with action plans that deal with uncertainties, management succeeds in turning the negative influence around.

On the reverse, if sales are better than projected, management can make adjustments to production or inventory control to meet the increased demand.

The point is that your business plan should be an ever-changing document, part of the fluid process of managing your business effectively with the right tools.

Evaluate the definition of your products and/or services at least twice a year. Do you have sufficient margin to operate in the black? How does your pricing compare to the competition across the board? Is there enough strength to keep your prices where they are and retain the business against competitive influences?

We worked with one client who was afraid to raise prices. She felt she would alienate and therefore lose customers. When we explained that without an increase she would be unable to keep the doors open, and that would eliminate all customers, she understood and raised prices.

There are times when you are working so hard you forget the reason you’re in business to begin with; the adage that you fail to see the forest for the trees is applicable. Get some outside help so you have other eyes to help you take the time to think and see golden opportunities in front of you.

3) Financing. In the economic era of Frank-Dodd legislation, banks and credit unions need to see a business plan to extend a line of credit or provide financing for your business endeavor. There are exceptions, of course.

One of our clients had gone to the bank with his updated business plan and got his line of credit extended. When he went back for financing to add an additional location, he figured he needed another update. The bank told him they were so impressed with his original update they were fine with that version of his plan. He got the funds to open a new store.

Since the economic downturn of 2008, government intervention in the banking and financial business has stifled the growth of our economy. The Fed wants banks to loan money, but keep a certain percentage of their assets in reserve funds. The result is the banks have to be more selective in the types of lending they underwrite, and as they take steps forward, there is an auditor or inspector watching every move and controlling where they can invest. It can be daunting for a business owner.

There are countless stories of business owners having a long-term relationship with a bank that comes to an end because the bank is divesting itself of those types of customers and loan portfolios. The owner stands in the street wondering which way to turn. She may have to work with a banker that is less than receptive to her operations, hopes, and dreams for her business.

The importance here is that the business plan needs to have realistic projections, and the business owner must be able to explain where the numbers came from, how they were arrived at, and how they will be met. If you fail to have the answer, your odds of getting financing are greatly reduced.

Just so you can say there were 8, here are 5 more reasons to have a business plan:

4) Create a new business.

5) Sell your existing business.

6) Share and explain business objectives with management.

7) Valuation of your business for formal transactions, such as estate transfer.

8) Deal with professionals.

Are you at a point with your business where you just don’t know what to do next?
Do you have a business plan?
How about a growth business plan?

Have you looked at a lot of different ways to grow your business and nothing seems to work?

The right growth business plan could be your answer. If a growth business plan is done the right way it may open up some opportunities you have never thought about before. A growth business plan can be developed many different ways but I would like to discuss a growth business plan that you may have never thought about.

Here is the way I would encourage you to set up a growth business plan:

• Do some dreaming about what you would like your lifestyle to be
• By dreaming decide on an average income you would like to have over the next few years
• Decide how many years out you would like your plan to cover
• Decide how much profit you would like for your business to generate above the income you want for yourself.
• Set up a profit and loss statement of your existing business or your proposed business
• With the right business knowledge and a profit and loss statement you can actually use that data to see what your business would need to do for you to give you that income and profit
• Even better you can determine what size market you would need and even determine whether your market would support your business presently and in the future.

To me a small business is one of the best things you can have if you enjoy operating a business; however, it does require a lot more than just enjoying ownership and running a business. Especially if you are starting a small business and even if you have had a business for many years, you should know what you want for your future. Never guess about your business. You see, without a plan, you are just guessing. We business people work hard and we always continue to hope for the best but when we guess, we’re taking a lot of risks. You’ve probably heard the old saying from an unknown author that says, “If you fail to plan, then plan to fail.”

As a matter of fact, did you know that the Small Business Administration says that 50% of small business owners will fail sometime during their first 5 years? There are lots of reasons but one big one is that owners don’t have a plan. Another is they have picked a product or service that doesn’t have a big enough market to sustain their business and sometime during their future they will run out of customers.

Now as I said, there are many other reasons too.

After graduating from college, I started out in manufacturing as an engineer in a pretty large company and now, 45 years later, retiring as a of Director of Manufacturing, I have discovered an awful lot about business. Not only did I learn and teach a lot about business, I worked with small business owners as well. I’ve learned that it comes down to this. Too many owners work hard in their business but less on their business.

Do you work on your business as much as you work in your business? Do you ever dream about having a good lifestyle but just haven’t quite figured out what to do about it. Have you ever thought about seeing what your business would need to do to give you those dreams? Developing a growth business plan could be the answer.

So, why should you make a growth business plan? Well in simple terms you need to know where you’re going and how and when you’re going to get there.

Some of the questions a growth business plan might ask you are:

– Are you comfortable that the market wants and is willing to buy your product or service?
– Is your product or service priced so it is competitive in your market?
– What’s different about your product or service? Why would a customer purchase it over someone else’s?
– Is your market big enough to support your business? What about 15 years into the future?
– If you wanted a better lifestyle, what would your business need to do to give you that lifestyle?
– How much sales would your business need to generate to give you that income?
– How much sales would your business need to generate to give you the income you want 15 years into the future?
– What will be the cost of your labor and material?
– What will your expenses run?
– How much will it cost to overcome the capacity constraints that will occur as your business grows to meet your income requirements?
– Will your profit give you the income you want in the future and at the same time maintain a healthy business for you as well?

If you develop a good Profit & Loss Statement for your existing business for the current year or for the first year of your proposed business, you can use this data to actually project how much sales you would need to yield the income you want and the profit margin you want. You can plan ahead as far as you want. Sound impossible? It’s actually pretty simple and can be pretty accurate plan.

A plan like this would show you how much sales your business would need to do, what your fixed and variable expenses would be, what your material cost, labor cost and profit would need to be to provide the income and profit margin you want. You can see pretty quickly if it’s possible for you to get your business to that level. I don’t know of any better way than to have your business give you the income and profit you want. What’s neat is you can determine what you want your income to be and your profit to be over the next few years and develop a plan that can show you exactly what your business would need to do to give you that income and profit.

And with just a little more data you can actually determine how many customers you would need for each year you plan for and how many leads you would need. From that you can actually determine what size market you would need and whether your market is big enough to supply those leads that could be converted into customers.

Learn more about how to develop a growth business plan. Visit http://www.StrategicBusinessSolutionsLLC.com

A business plan takes an important role for you if you are running any kind of business because the plan will help you in controlling your jobs so you can get the right goals for your future. In this case, it is important for you to create a business plan report that will help you in knowing the growth you have already made in your business so you can be sure about the business you are running. If you would like to create this report, this article will give some instructions you need to follow to make the best report for your needs.

1. The first step you need to know in making this kind of report is to write the executive summary. In this summary, you need to give more explanation about some things such as your mission statement, your service or products, the history of your business and other things related to your business. Also, you must include your goals in it because it is important for you.

2. The next step you must consider in making the report is to do market analysis so you will understand about the target you must reach in your business. Also, it is important because it will guide you to the right path so you can take benefits from it.

3. Also, it is crucial for you to analyze the competition you are facing. Knowing this thing will help you to know your strengths and weaknesses so you can make it unique. Keep in mind that uniqueness is really important in running your business. It means that you are able to give better services for your clients.

4. For the next thing, you are advised to make an outline about the management of your business. This information will help you in knowing better about your business so you can be sure that it will support your business very well.