A business is more than just a hobby or an idea. If handled well, it becomes a living thing with the power to support the economy and families of people involved in it. Similarly, a business plan is more than just an overview of what you propose to do. Drafting a business plan is a serious project which becomes a binding commitment for the business owner.
A business plan forces you to review everything at once: your value proposition, marketing assumptions, operations plan, financial plan and staffing plan. The more detailed your plan when you start, the less time and energy you’ll need to invest when things start growing and demand more operational time from you.
Here are some main reasons for having a business plan. Some are obvious while the others show their merit in the long run.
1. OBTAINING CAPITAL AND FUNDING
Having a business plan in place is a surefire way to convince investors to align their interests – and funding – with your enterprise. A well-crafted business plan gives the appearance of seriousness, professionalism, and a dedication to hard work in the years to come – all of the things that investors want to hear and see before they invest their precious dollars in your company.
A business plan clearly delineates and characterizes goals, priorities, strategies, and safeguards to ensure your venture gets off the ground and into fruition. By clearly indicating (via a business plan) where your time, resources, and energy are allocated, you have an easy protocol to follow for guaranteed success.
2. FUTURE-FRIENDLY OVERVIEW OF THE BUSINESS
When business planning is performed correctly, it can become a roadmap for the team to follow in the coming years. While deviations and distractions may happen, a good plan will always act as a guide to bring things back on track.
3. BETTER IMPLEMENTATION OF STRATEGIES
As in life, focus plays a big role in business too. A good business plan helps entrepreneurs, startups, and small businesses focus on their real strengths and challenges in a competitive market. With better focus on the right targets, you can strategically tailor your product and service offerings to match the audience.
4. ATTRACTING RIGHT TALENT
A well-written plan is great for attracting talent. When a prospect asks to understand your business, your plan can give them an entire overview. The written record of your goals coupled with a track record of delivering against those goals tells the prospects that you understand your business and can deliver the results you promise.
5. MANAGING CHANGE
There are plans and then there is life. Whether new business or old, bumps in the road are part of the journey. Some endeavors will fail, tasks may need repeating, and priorities may need reviewing.
However, having a business plan in place is an excellent way to deal with the occasional failure or bend in the road and to move on strategically. Otherwise, every failure can send you into a tail-chasing spin, leading nowhere.
6. BROADENING ACCOUNTABILITY
With good planning comes clearly set accountability, results tracking, and goal-setting. A business plan is an essential apparatus that requires business owners to conduct regular reviews of their business, where it needs improvement, and where more time and resources need allocating.
Does your business plan clearly express the intended audience you are trying to serve? And do your products/services cater explicitly to this client base? Talk to us at Fintax Services and we'll be happy to help you.