The Importance of a Business Plan
They are essential, and if you do not already have one, then you are already one-step behind.
You don’t believe it?
Well I am about to explain to you why.
It gives you direction
It makes you question things, and research them. An empire is not built overnight after all.
- Is your product or service right?
- What is your target market?
- How much does it cost to make/do?
- What equipment do I need to start this, and how much is that going to set me back?
- What does my competitive landscape look like?
There’s a bit involved in a business plan, have a look here for the breakdown.
Helps you get finance
A bank or investors are not going to be throwing cash your way willy nilly. They want to know alllllll about you; why should they give you their money.
They want to see what kind of business you run, what your numbers currently look like, your forecasted numbers, and your plan to achieve and increase such numbers (well the profitable ones at least).
A business plan will allow you to see, along with potential investors where your business is heading into the future.
Gives you a starting point to set your goals
Your business plan shows you where you are heading – you can then start to break these down into short, medium and long term goals, and then detail just how you’re going to reach them.
To make sure these are effective, make them SMART goals. Check out this article to get you started.
It gives you an overview of your business.
Your business plan should cover all facets of your business. It will give you a guide for your financials. What is your expenditure vs. income? It is a guide as to how you plan to market yourself and your business, how you intend to position your company in the market as well as outline your logistics planning.
Your business plan is your one stop shop to keep you on track.
A solid business plan will provide an understanding of where your business is at, where you want to be, and how it should be operating.
It is something you can also share with your management team as you begin to grow and your tasks change.
Just remember this is not a set and forget kind of thing – it is like a pet gold fish. It is not going to die if you forget to feed it for a day or two, but it needs some love and attention every now and then to keep it working and functioning / swimming in its prime.