Having a business plan can help keep the direction and efforts of a business moving in the right direction. It’s tempting to think that business plans are only useful for huge organisations to communicate strategy to staff. This isn’t strictly the case!

Even for those working alone, it’s a good idea to regularly review and update your business plan. And yes, it should definitely include more than “start business, make lots of money, and retire”.

So what exactly is a business plan for? Well, apart from the obvious, a business plan will:

• Help you identify your ideas clearly, and keep you on track towards your goals
• Improve decision making
• Demonstrate the viability of your business
• Help you formulate ongoing strategies
• Allow you to share your vision more easily

Identify your ideas and use your business plan to work towards them

Check out guidance on what to include in a business plan, and you’ll probably find questions you haven’t even considered.

Answering those questions will give you a clearer idea of where you want the business to go. More useful, it will help you understand what you need to do to get there. Identifying hazards early on will go a long way to keeping out of trouble!

Improve decision making, because you know what your goals are

Realistically, nobody really consults their business plan before making decisions, especially on smaller stuff. But at least these considerations will be on your radar, and having one can actually help you make a lot of decisions in advance.

A plan will inform your methodology, your marketing decisions, and the rate and scope of growth. That means fewer hasty decisions during that delicate start-up phase, and a better idea of your financial situation and start-up costs.

An awareness of demands on your cash will reduce the temptation for making rash purchases or financial commitments. Over-stretching yourself financially is dangerous, and things are rarely cheaper than you expect… unfortunately!

Use your business plan to demonstrates the viability of your business to potential investors and lenders

Any potential investor or lender will want to see your business plan, and that it includes well-researched facts and figures.

• Is there a market for what you want to do, and is there still space in that market?
• Who are your competitors and is there a realistic chance of you existing alongside them whilst attracting some of the market share?
• Do you have the resources you need?
• Will the price point deliver a viable profit margin?
• What are your short-term and long-term plans and projections?

Working your way through those questions, and being able to supply honest, workable answers, makes your business a much safer bet.

A business plan will help you formulate ongoing strategies

A business plan isn’t just for the short term. It’s a working document that can be referred to regularly, and updated too. Let the targets and ambitions you included help you formulate your action plan from week to week.

If doubling your customer base was a business plan goal, research the best ways to do that and then put those tasks into your action plans. This way, you’re always working on small achievable steps which contribute to the overall success.

Share your vision quickly and clearly

Employees, freelancers, your accountant, potential business partners, other businesses interested in your products or services… They will all want to know where your business is heading.

A business plan is a simple way to share that vision, and will also enable others to identify factors you have missed. Never be shy of listening to the advice of others, though what you do with it is up to you.

A major part of business operations is financial management. We provide tailored accountancy services in a personal way, plus our bookkeeping software, Pandle, is included! Find out more about how we can help.

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About The Author

Beth-Anne Bruce

I'm an experienced and fully AAT and ACCA qualified accountant, who is enthusiastic about helping business owners succeed. I also love cooking and needlepoint (at different times!). Learn more about Beth.

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