When Do I Need to Start Building a Business Plan?
As an entrepreneur, you may ask yourself: is a business plan essential? And, if so, when do I need to start building one? The short answer is YES, but earlier than you might expect!
According to the Harvard Business Review, the planning stage is crucial to brand success. However, knowing when to write a business plan also determines viability. Timing plays an equally (if not more) important role in business plan strategy. Let’s take a step-by-step look at what it takes to build an effective business plan at the optimal stage of development.
Business Strategy 101
Any new venture comes with a long list of decisions that need to be made. From target population to mission and goals, every aspect of the business must receive careful consideration. With that being said, it’s always wise to remain flexible and open to new possibilities. The most successful entrepreneurs can spot an opportunity for growth and pivot as needed
1. Mind Your Time
Research shows that the best time to write a business plan is between 6-12 months after deciding to start a business. While this may seem counterintuitive, there is good reason to believe that waiting for a short period of time will actually enhance your future prospects. These milestones would indicate that you are ready to start building a business plan:
- You have already started talking to customers
- Your product is almost ready for market
- You are actively thinking through promotional and marketing activities
2. Work Smarter, Not Harder
The logical assumption might be that taking your time to write a detailed business plan is the wisest course of action. This is true, to an extent. However, research indicates that the ideal length of time is approximately 3 months. Why is 3 the magic number?
- Spending 1-2 months on a plan is simply not enough time to gather enough data to build your budding business
- Spending more than 3 months on a plan will prove futile, as the information used to inform your plan is not current (and may no longer be relevant)
- Spending 3 months on a plan allows you to do a deep dive into business plan strategy while still using current and relevant information
3. Deliver the Details
Knowing what details to include in a business plan can elevate your brand to the next level. After all, why build a plan unless it has the potential to achieve great success? Effective business plans are sure to identify and expand on the following details:
- Customers: Who is your target audience?
- Competitive edge: Why should customers choose your brand over another?
- Company and money-making operations: How do you plan to acquire and manage funds?
Clearly, a business plan strategy involves a lot of moving parts. Timing is one of the most significant components in developing a solid business model to grow your brand. Additional considerations include target audience, competitive analysis, and financial factors, among others. But how do you synthesize all these elements into a robust strategy in today’s shifting landscape? If you are looking for more information in regards to When Should an Entrepreneur Write Their Business Plan? read the article.
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