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Top 5 Reasons Having a Business Plan is Important for Small Businesses

by iimarcusbrownii
Top 5 Reasons Having a Business Plan is Important for Small Businesses

A business plan acts as a layout to set up and grow your business by giving it the framework and direction it needs. Not every small business owner feels the need to plan for their business, believing it uses unnecessary time and resources to build business plans. However, they don’t realize that the benefit of having a good business plan is worth it.

Here are some significant reasons why a business plan is essential for a small business.

1. It Promotes Growth

Everyone knows how hard it is to grow a small business. However, studies show that you can increase your company by about 30% faster if you have a good business plan. Having a plan means you have set goals and pathways to reach them. You can also measure the progress and make changes along the way if you have a set plan.

2. It Reduces the Risk

Business is full of uncertainties as various uncontrollable factors such as market conditions, economic situations, consumer behaviour, and much more affect your business. Hence, it is always a risk to run a small business. However, there is a certain level of forecasting the future and ensuring that you are prepared for unfavourable business conditions with planning. One such very popular platform that provides useful information is CreditQ. A business needs to join hands with other businesses for raw material, manufacturing, or other needs. Knowing the Business Information Report of the firm you are planning to deal with considerably reduces the risk and results in a smooth transaction.

3. Help With Loans and Investments

If you are looking for some external capital, you need a business plan to show your investors and lenders what your business plans to do with the money and how it is valuable and profitable in the long haul.

You may not need to provide a detailed layout, but the chances of investors agreeing to invest and loans getting approved go down significantly without any solid business plans.

4. Make Better Investment Decision

Having a proper business plan helps in getting money and spending it wisely. Whether you want to expand your business or increase your team strength, you won’t have to worry about managing the additional costs. You have a plan that tells you the source and profitability of the venture, giving you the confidence to make better decisions.

5. Identify Problems Early On

Another essential benefit of having a business plan is identifying any financial, administrative, or marketing and sales problem in your business early on. You rectify the mistake quickly as you know what a supposed to happen according to your plans and where things went wrong. It helps minimize the losses and problems in your business significantly.

About CreditQ

CREDITQ is the industry’s premier credit information and management platform in India. It encourages both sellers and buyers to start a business and agree. It also provides a platform for MSMEs, entrepreneurs, and GSTN holders to report business credit defaults. You can create a CIR to determine the trust of a new customer before negotiating with them. CREDITQ is a female startup registered as a startup at DPIIT. Available on the web and the app (Android and iOS).

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