When you make a business plan, it sets up how you want to run your business and what goals you have. This is a critical part of starting a new business, especially if you are signing a contractual agreement with one or more business partners and you want to make sure everyone is on the same page.
One way to think of this plan is like a road map. It helps you know where you want to go and gives you directions for the future. With your eyes on that goal, the specific steps you take along the way may change. Maybe the market shifts or a new product does better than expected or you end your relationship with that business partner.
You can’t anticipate everything. With your road map written out in advance, though, you can make decisions with that overall goal in mind.
Your business plan may reflect how you plan to fund your company. If you already have the money in hand, or if you’ll just grow the business as you go, then the plan is really just for you and your business partners. It may not need to be as precise.
If you need to go out and get investors, though, then you need a very clear plan that lays out your goals and how you will accomplish them in a concise manner. You have to define everything to the letter and show how you’ll get there. Your investors want to know that you have a distinct plan to capitalize on their investment and get them a return on their money.
Throughout this entire process, make sure you take the time to fully understand all of the legal steps you need to take as a new business owner.