According to the US Small Business Administration (SBA), “Your business plan is the foundation of your business.”
Interestingly, in a research paper from the Babson College, in which 116 new ventures were studied, it was discovered that no more than a third of the ventures had written detailed business plans! Those ventures with a written business plan at the outset had more revenue, more net income, and raised more startup money. Further, an article from Harvard Business Review stated that business founders who write a detailed business plan are 16% more likely to build viable businesses than those who don’t. Finally, other research shows that owners who complete written business plans are twice as likely to grow their business successfully, or obtain capital, compared with those who don’t.
If a business plan is the foundation of a business, it would make sense that those businesses with written, detailed business plans would be more likely to have more revenue, more net income, and raise more startup money – the business plan clarifies intention, focuses attention, and serves in establishing both trust and confidence. The results are clear – having a complete business plan is as essential for a business success as is breathing air for a human being.
Thanks for reading!