Work through important details with partners
If you're starting a business with another person, a business plan becomes all the more important. This is the document where you can work through the details, including how much you'll spend during the startup phase, and who is responsible for each aspect of the business operations.
If you need to secure funding for your business, a business plan is crucial. Lenders and investors want to know that you have a solid plan in place for reaching profitability and repaying borrowed funds. The financial portion of your business plan should demonstrate when you expect to reach profitability and how you'll be able to repay your debt.
Define your marketing plan
Having ideas for how to get customers is an incredibly important part of starting a business. How are your customers going to hear about your business? Are you going to use local or digital marketing to reach them? These important details can get overlooked when there are so many other parts to starting a business. By taking the time to write a business plan you're forced to think strategically about how you'll approach marketing. That advanced planning can make all the difference to the early success of your business.
Crunch the numbers
How much do you need to sell for your business to break even? At what point will your business become profitable? What's the right price to charge? These important numbers are covered in your business plan. After writing your business plan you'll know your margins, how much business you need to bring in to turn a profit, and how much you can spend on startup expenses like office space and staff. One of the main reasons small businesses fail is because they run out of money1 — crunching the numbers ahead of time could save your business from that fate.
While writing a business plan is time-consuming, it worth the effort to ensure you're setting your new business up for success.