Business plan key to successful entrepreneurship

By Yinka Kolawole, with agency report

Why do many entrepreneurs who have brilliant business ideas never find the capital to transform their ideas into real life businesses? Why do most startup businesses fail to attract the loans and investments they need to grow and succeed?

Why do more than 80 percent of businesses fail within their first five years? Basically, because many of them did not have a plan. Like most people who travel to an unknown destination without a map, guide or directions, businesses without proper planning get lost and never reach their destination (success). As an important venture that requires an investment of time, effort and money, entrepreneurs must take business planning very seriously.

Business plan signifies strong commitment

Studies have shown that entrepreneurs who have the discipline to prepare a business plan are two and a half times more likely to get into business. Writing a business plan helps to focus and fight procrastination. Investing time and effort in researching target market, analysing competitors and estimating profit figures is bound to increase interest in bringing business idea to life. A business plan has the power to positively affect your mindset.

When an idea is left undeveloped, it starts to lose significance. As you gather information about your business, you start to develop a strong level of confidence and ecan-dof spirit around your business idea. Whether you plan to start a business from scratch or want to expand an already established business, a plan will keep you interested, focused, committed and determined to take action.

Business plan helps in developing idea

The problem with thoughts is if you don’t write them down, you may forget them entirely. So you decide to write down your brilliant business idea. However, to become a real business, certain actions and investments of time, effort and money must happen to transform your beautiful idea into a successful business. How will you start? How much will you need and who will you get it from?

What kind of customers will you target? Who is your competition and what will you do to protect your business from them? Are there any licenses, permits or government approvals you need before you start? Who will be responsible for what? All of these are important questions that must be answered in order to transform your idea into a real business.

A business plan allows you to see your business from the top and understand how all the elements will fit into one another. Business plans often bring up interesting and creative alternatives that could make your original idea much better and powerful.

Better preparedness and more likelihood for success

Toyota is one of the most successful car brands in the world. Year after year, it continues to release the most beautiful and reliable ‘driving machines’ my eyes have ever seen. Like most car manufacturers, Toyota invests a lot of time, effort and money in the early stages of developing every new car model.

A couple of years before the new model is released, Toyota’s engineers and specialists brainstorm tirelessly on different aspects of the new car model, especially in the areas of comfort, safety, speed, control and beauty. Toyota is serious about planning because it knows planning is always required for success. Toyota is always prepared, that’s why it always succeeds. Investing in planning usually leads to better preparedness, fewer surprises and a higher likelihood for success.

Keeps the business accountable

You are very likely to be the biggest risk to your business. Because you’re answerable to no one in your business, there’s usually that temptation to take the business for granted. A business plan allows you to set goals and track your progress and levels of achievement over time. Without this accountability, the business will always be subject to guesses and impulsive actions and will definitely perform below its best potentials.

People who set specific, measurable and time-bound (SMT) targets for themselves usually perform much better than others. A business plan is the only way for entrepreneurs and businesses to hold themselves accountable using SMT targets. It’s the best way to eliminate procrastination, reduce the fear of failure and inspire you to take quick and bold actions that will make the dream business come true.

Busines plan boosts chances of raising capital

How can you bring out that brilliant business idea and present it to potential business partners, bank loan officers, investors and other people who can provide the capital you need to start or expand your business? A plan is the most effective way to communicate your business idea to other people in a clear, complete and convincing manner.

Partners, investors and bankers are more likely to take you seriously if you have a well-written and professional business plan. Banks and investors actually take business plans very seriously. Because the information it provides helps them to properly measure the risk of investing in your business. Banks and investors take calculated risks; they’re not gamblers. Anybody who’s interested in your business idea wants to see that you have taken the time to do a proper and detailed planning.

- Culled from: http://www.vanguardngr.com