As you start planning your small business, it is important to understand why having a business plan is such a crucial step to your success in Canada.
While some businesses succeed without a plan, having a well-thought-out business plan puts you in a much stronger position.
In fact, over 78% of small businesses fail within the first year—often due to lack of planning.
The video above, titled “Why your business plan is the #1 crucial step when starting up”, explains the importance of business planning.
This video is part of the small business video series, where you can learn more about starting up, building a business plan, and finding funding.
How Can a Business Plan Be Helpful?
A business plan may seem frustrating to create, but it can be the difference between success and failure.
Many entrepreneurs invest time and money—but overlook planning.
A business plan is not mandatory, but it is extremely valuable.
Common Uses of a Business Plan:
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Apply for bank funding
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Evaluate your business idea
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Plan your business step-by-step
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Determine your financial position
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Identify funding needs
Evaluate Your Business Idea
A business plan helps you analyze your idea in detail.
Key Areas to Evaluate:
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Products and services
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Pricing strategy
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Target customers
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Market positioning
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Growth opportunities
You may discover:
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Some offerings aren’t needed
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New opportunities to expand
Understanding Your Audience:
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Age, gender, income
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Interests and behaviors
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Primary and secondary markets
A business plan evolves your idea into a structured, actionable strategy.
Business Plan as Your Blueprint
Your plan becomes your roadmap.
It helps you:
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Identify strengths and weaknesses
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Outline growth strategies
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Analyze risks
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Prepare for real-world challenges
Financial Planning Helps You:
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Forecast revenue
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Identify startup and ongoing costs
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Determine capital needs
Access Funding with Your Business Plan
A completed business plan is essential for funding.
Most lenders and funding agencies require one.
Why It Matters:
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Shows commitment and preparation
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Provides financial projections
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Demonstrates viability
Key Financial Components:
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Balance sheet
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Cash flow statement
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Profit & loss statement
What Funders Look For:
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Revenue strategy
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Expense breakdown
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Funding requirements
Be realistic—no one funds a risky or unclear plan.
Business Plan Statistics
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Entrepreneurs with a plan are 152% more likely to start their business
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A business plan increases success rates by 30%
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78% of businesses fail in year one due to lack of planning
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Businesses with plans are 50% more likely to secure funding
Final Thoughts
A business plan is the #1 step when starting a business.
It helps you:
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Understand your idea
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Identify risks
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Plan finances
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Secure funding
Proper planning allows you to fix problems before they happen.
If you’re starting a business in Canada, consider working with a Canada Startups expert to guide you through planning and funding.