Surprisingly, many people claim that a business plan has no value & is just a waste of time – they tap their heads knowingly saying that it’s all in there.
Well this notification can be dismissed as being without any logical basis as every single activity, from the day to day running of your business to long term projects requires planning, investigation and analysis.
No Business Plan?
Fail to Plan = Plan to Fail
Having a business plan is just as essential for your business as it is knowing where you are going when you drive out of your house, ie if you do not know where you’re going, you’re not going to make much progress in getting there.
So whilst its fairly obvious that any business, new & existing, needs proper planning, there are some less obvious reasons for this.
5 Top Reasons Why You Need a Business Plan for Your Business
- To Test the Feasibility of Your Business Idea – Formulating a business plan can save you a great deal of time & money as it will soon reveal that your business idea is untenable if this is in fact so. Whilst an idea for a business often sounds like a real winner, it can often be found wanting & therefore discarded at the marketing analysis or competitive analysis stage.
- To Secure Funding – Any potential investor in your enterprise will want to see a well developed business plan before investing, ie, they need to ensure that the return on their capital will be secure.This also applies to established businesses as they often need capital for expansion or to carry them through market downturns. The same applies to lenders if you need to get a short term business loan.
- Targets – A business plan must contain realistic targets, short, medium & long term, that should be aligned to the core objectives & mission statement of the business. This gives the entrepreneur the framework as to what must be achieved.
- Focus – Reducing your well though out ideas to writing will ensure that you focus your efforts, set objectives and formulate company direction & policies.
- Growth – Without proper planning & growth objectives you will be in the dark as to if you are on track with your business’ growth projections.
So whether you’re just starting out, need funding or want to monitor the health & growth of your business, creating a business plan is essential for the successful management of any business regardless of its size or turnover.