Having a business plan can help keep the direction and efforts of the business focused in the right direction. It’s tempting to think that business plans are only useful for huge organisations, as a tool for communicating strategy to staff. This isn’t strictly the case!
Even for those working alone, a written strategy should be regularly undertaken and reviewed. And yes, it should definitely include more than “start business, make lots of money, and retire”.
A business plan will clarify your ideas and keep you on track
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!
A business plan will help improve decision making
Realistically, nobody really consults their business plan before making decisions, especially on smaller stuff. But, having one can help make a lot of decisions in advance.
It will help inform your methodology, your marketing decisions, the rate and scope of growth. That means less need for hasty decisions during that delicate start-up phase.
A business plan will also give you a good grasp of your financial situation and start-up costs. A heightened awareness of demands on your cash will reduce the temptation for making rash purchases or financial commitments. Overstretching yourself financially is dangerous, and things are rarely cheaper than you expect… unfortunately!
A business plan 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 and 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.
A business plan allows you to share your vision
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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An SEO Copywriter and Content Creator. After more than ten years of enjoying myself by turning difficult subjects into elegant, simple language, I still can't believe I get paid for this.