Creating a business plan is the most fundamental step in building a business, and the importance of it cannot be underscored enough. You may ask, “Why do I need a business plan? Why can’t I just launch my business and get to market?”

First, you must define your business and how you’re going to compete. You must understand the market and the space your business will occupy in that market vs. your competitors. You’ll need to clearly define your product and why your customers should be interested in it.

Once you’ve defined that product, you’ll need to have a good understanding of how you’re going to take it to market. After that you need to understand and articulate how you’re going to operate that business, and create a plan to support those operations. Most likely that will mean you’re going to have people, so you’ll need a plan for managing them and the resources that come along with them. You’ll also need to define the administrative responsibilities and how you’re going to fulfill them.

Once you’ve got all that down, you’ll need to project your financial results and create a clear financial plan that helps you understand how the business should perform over time.

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