Every start-up has one primary objective: growth.
When you’re putting in the hard work to establish your business, you’re doing it to achieve long-term success and make it a recognizable name in your industry.
There are many different growth strategies you could try, including market penetration and diversification. But, if you want to keep your employees, associates and investors interested in your business and its success, you need a formal business plan. This is the blueprint upon which you would want to establish your company, and you’ll need to figure it out before you launch.
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Running a Business in Canada? Know How to Be Successful
Canada was ranked the 3rd best place to start a business by the World Bank’s Business project in 2016. In 2017, their annual report stated that Canada was the 2nd best economy in the world for starting a business.
But, when it comes to actually doing business here, Canada is definitely not one of the easiest places. And with all the restrictions and regulations Ottawa places on starting a business, you will face challenges. That’s one of the reasons why so many small companies fail.
Establishing a new business venture is a huge investment of money, time and effort. Having a sound business plan can be your secret to success.
Reasons You Need a Business Plan
Think of it like this. When you build a house, you don’t just go to an empty lot and start nailing boards. Similarly, you can’t build a business without a plan. There’s just too much risk.
A proper business plan is necessary not only for running your business but for its growth and expansion. But unlike buildings, businesses aren’t static. Truth be told, any company’s business plan will change with time to stay current with its goals.
Let’s look at how important a business plan is for your start-up.
1. It Tests the Feasibility of Your Business Idea
A written business plan is the best way to test how feasible your business idea really is. Consider it your safety net. If the idea turns out to be unsustainable, you may be able to back out without wasting a lot of time and money.
A marketing analysis can also tell you whether your business idea should be worked on or discarded. This will give you ample time to move on to the next – and hopefully better – business idea.
No matter how confident you feel about your “unique” idea, learning about the industry, potential customers and your competition will always increase your chances of success.
2. It Gives Your New Business Its Best Chance of Success
A business plan makes sure you pay attention to both your big objectives and smallest details, including budgeting and market planning. The result is a smoother experience during the turbulent early days. Since a business plan gives you a sense of issues that might otherwise be unforeseen, managing them becomes less of a problem.
Practicing market planning and budgeting in dedicated way helps define your business’s target market, pricing strategies and unique selling proposition. Proper budgeting also ensures that your capital requirements remain fulfilled. Keeping all your financial transactions up to date can be a great help in this regard.
3. It Can Grow Your Existing Business
Having a business plan isn’t just necessary for anyone starting a business but for those already running one. Once you’ve established a strategy and start utilizing your resources accordingly, you can grow your company. Annual business plans aren’t just for large firms. If you run your business based on current circumstances without looking ahead, it will be difficult to grow.
To achieve success, you need to be proactive about your priorities. These can be anything, from a strategic plan to an annual plan or even an operational plan. Whatever you call it, its management can help prioritize your ongoing concerns for better growth.
4. It Can Help Secure Funding
Any new business requires operating capital, and without a well-developed business plan, this can be difficult to acquire. Without proper planning, established financial institutions will be loathed to deal with you.
Remember, your investors and financiers are looking at your risk of default. Positive word of mouth can’t replace documented facts and figures. An up-to-date business plan ensures you a better chance of getting money for growth, operations and expansion.
5. It Can Grow Investor Interest
Having a solid business plan gives you a better opportunity to attract venture capitalists or angel investors. Sure, an impressive presentation may do the job but not as well as a well-written document they can take away and study. This gives them the chance to better understand what they’re investing in before making any commitment and increases their faith in your business.
Your business plan will be scrutinized, so make sure it’s as complete as possible. Creating it will be time-consuming but it’s an essential tool if you want a successful business that lasts beyond its first year. And if you already have a company that doesn’t have a business plan, it’s high time that you started preparing one! The result will be worth the effort.