4 Incredible Reasons Why You Need an SBA Business Plan

At least 50 percent of all startup businesses collapse in their first four years. What you don’t know is, no one starts a business with an intent of failing. But what happens? 

The causes of failure are diverse, but most of them are avoidable. For instance, 52 percent of all businesses that fail do so because they don’t have or have an incomplete SBA business plan. 

Having a concrete business plan increases your chance of growth by 30 percent. But you need to know, it’s not as simple as you may think. Just having a business plan doesn’t guarantee your business that it’ll grow faster, No! It’s the nature of your plan and how you utilize it. 

So, if planning increases your chance of success and boosts your ability to grow, why not start on it immediately. Also, you may engage a Business Plans Writing service for professional guidance and assistance. Planning early for your business allows you to establish your legitimacy. It gives you the courage to engage potential customers, look for funding and gather any material information you need. 

Here’s why you need a business plan. 

1.   Helps You Get Funding 

As an entrepreneur, you’ll need capital to start and run your business. Without it, your business is as good as dead. 

In fact, 82 percent of all businesses that collapse do so due to liquidity problems. The fact that most entrepreneurs, 70 percent rely on their own savings to start and run the enterprise doesn’t help a thing. 

As a business owner, you’ll need to use your plan to raise more capital. In fact, research shows that complete business plans increase the chance of acquiring a secured loan by 36 percent. 

With this, you can invest your resources, and keep the business afloat until it breaks even. 

But having a business plan on its own won’t cut it. The venture capitalists will want to hear how much you believe in the idea. How prepared are you to start and run your business? If you can’t answer this question, you won’t be able to secure funding. 

What this means is, you have to be passionate about the plan and own every bit of it. As such, you can communicate verbally about anything on the document. The target market, sales projections, and marketing strategies and so on. 

2.   Simplifies Your Decision-Making Process

As an entrepreneur, you’ll be tasked with making important decisions about the firm. Well, in every business, there are some aspects that can derail or cripple your business if you’re on the fence. 

For instance, your plan needs to elaborate the skills and qualifications your top management should have. Having this information on paper prevents against making mistakes. Don’t forget that 30 percent of all businesses that collapse does so because of inefficient, and unqualified leadership. 

Having a wrong person at the helm of your company is disastrous. The mistake has a tendency to have a ripple effect on other sections of the business. Remember, these are the people you'll be tasked with the responsibility to manage your financial, human and capital resources.

Imagine the disaster if the employees were incompetent or unqualified. The damage would be irreparable. In fact, 13 percent of all business that fails do so because of incompetence.

3.   Makes it Easier to Start a Business 

Most entrepreneurs love to dream up new ideas. There is always thinking of ways to solve new problems and improve their businesses. 

But these noble dreams don’t come to a reality. They just remain like that, ideas. But other entrepreneurs may see the same opportunity and act. 

A study done and published in the Small Business Economics intimates that entrepreneurs who create business plans for their businesses are 152 percent likely to start the enterprise. 

In fact, the ones with a plan are 129 percent likely to push beyond the initial startup stage and grow it. 

Interestingly, business people who create business plans are 271 percent likely to close shop. Seems counter intuitive to the statistics above, right? But if you think about it, it makes sense. 

Entrepreneurs with valid business plans track their performance regularly. They know when things aren’t going according to plan. When marketing strategies seem to fail or when they can’t meet their sales projections. 

With a plan, you’ll know when it’s time to walk away and try something out and when to keep fighting. 

4.   Improves Your Chances of Becoming Successful 

Nothing can fully protect your business from collapsing. But it turns out, having SBA business plans helps lower the risk. 

Having a Startup Business Plan and updating it regularly shows you’re tracking your performance. You’re able to make adjustments. If the strategies don’t work, you know it and how to react. If things are going well, you’ll know what works and improve on it. 

Conclusion: 

In the end, drafting an SBA business plan seems more like common sense. You can’t set up a trip without a map and a destination, would you? 

It’s not a question of whether you need to plan or not. It’s what type of planning you do. The best business plan is iterative. It remains alive and can adapt to changes in the environment. 

A business plan isn’t about predicting the future, No! It’s a tool to refine and adapt your business strategy as you grow. A tool that helps refine your enterprise to the constantly changing customer needs.