Why is it important to write a business plan?

We’ve talked before about the elements of a business plan. But what are the benefits of writing one?

A business plan is the design and construction plan for a great small business. If you wanted to build a house, you wouldn’t walk over to an empty lot and just start nailing boards together. You’d follow a blueprint that tells everyone what the finished product should look like and how to build the home. Essentially, a business plan serves the same purpose.

There are five really good reasons to write a business plan before you start a business:

1. To test the feasibility of your business idea and work out any bugs on paper first.
2. To develop strategies ahead of time for marketing, finance, operation and human resources, instead of when you’re in the fast-paced start-up stage.
3. To get funding like a bank loan.
4. To attract investors.
5. To have a roadmap to follow for at least the first year in business.

For more about business plans, read about what a business plan contains, and what the secret is for writing one.