The Importance of a Business Plan

Article By: Temi Koleowo

Business First Steps

A lot of excited new business owners make one critical mistake out of the starting gate.  That is, they skip the business plan and planning process.  The business plan is critical to startup businesses for three main reasons.

  • First, it causes the new business owner to work through a diligence process that causes the entrepreneur to think of aspects of  the business that may be overlooked.
  • Secondly, it provides stability and legitimacy to the business.
  • Finally, a business plan at the start up stage enables the business owner to obtain financing, investment, and strategic partners.

Business planning is the critical step that a business owner needs to work through to effectively start a new business venture.  I know what it’s like to have an ‘eureka’ moment but if care if not taken it can lead to failure.

Starting a business may seem easy, and may even be easy for a person with a vision.  One of the most common business start-up scenarios is someone who works for a company or has a job, and they suddenly feel that they can build a better mousetrap.  In fact, it’s common for someone to see the product or service of the new business start-up, but miss some critical aspects of a business.

A business plan can help with that.  By causing the entrepreneur to go through critical planning steps, and consider such aspects as accounting, sales and marketing, strategic planning, and even legal structure, a business plan helps a new business owner consider aspects of a business that are critical, but maybe unexpected or not anticipated.

A business plan also provides legitimacy.  A new business start-up without a business plan is like going on a road trip without a map.  Businesses launch and fail on a constant basis.  Without a business plan, a new owner may find himself or herself shooting from the hip, and making quick decisions without having an overall concept of what the business may be lacking.  A strong business plan provides the support and internal stability that an owner and employees can rely on.   A new business plan is the source of legitimacy and stability of a new business launch.

No partner, investor, or banking institute or organization will consider providing any sort of investment capital without a comprehensive business plan.  Venture capital or any type of investment will first be put through the rigorous audit of a business plan.  Without this business planning step, virtually no individual such as an angel investor, or financial institutions will consider capital without a business plan.

Preparing a business plan is crucial to the success of a new business.   By the arduous process of business planning, an entrepreneur will go through the necessary steps of looking at all sides of a new business.  The business plan will become the crux that the new business will stand on.  The structure and stability of the business is easily enhanced by a business plan.  Finally, without a business plan, no financing or capital investments are even a consideration.  A well written business plan is a critical aspect of a new business venture.


Need a Business Plan? Contact Business First Steps.  Business First Steps has helped countless clients translate their business ideas into comprehensive business plans to secure investments.  We also help existing businesses create a clear pathway when introducing a new product, service or business addition.  Our business plans are affordable, comprehensive and a worthy roadmap for any business.


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Other articles by Temi Koleowo:

Cashing in on Your Hobby

How to Get your To-do List under Control

The ‘Why’ of a Home Based Business

10 Tips for a Successful Business Pitch

Home Working and Keeping Distractions At Bay


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