A business plan is a crucial step for any successful business venture, but is all too often forgotten or put on the back burner. Find out why you need to put it at the top of your `to do` list.
Many owners see business plans as merely a way of acquiring funding. They do not recognise the power of the business plan in steering their business forward many months or even years down the line.
What’s the point of a business plan?
A business plan serves a critical purpose in any organisation. It focuses your efforts, enabling you to spot potential pitfalls. It also allows you to set realistic targets and to trace your growth.
Good business plans enable you to structure and monitor your business, as well as recruit the right level and calibre of staff.
However, even when written, most business plans tend to end up in someone’s drawer. This completely defeats the original purpose and will not serve any benefit to your company.
Business owners need to communicate their business plans to their organisation and to their staff so that everyone is singing from the same hymn sheet. The document should not be reserved for the eyes of management only – all employees should understand the opportunities and the threats to the business.
Businesses that are well-established tend to use a business plan every month to realistically analyse whether or not they are on track. A business plan allows you to consider detailed market research in relation to your competitors so you can fully understand where your business is going.
The benefit of having it written in black and white is that it focuses your mind. It’s also extremely motivational to write. More importantly in a recessionary period it allows you to confidently turn down certain opportunities that which come your way. If an offer is not exactly in line with your business plan you should say no to avoid becoming sidetracked.
That said no business plan is good if it’s too static or inflexible.
A business plan is a good way of making people in your business accountable.
Business plans can be as simple as a single sheet of paper to focus your mind or as comprehensive as a 70-page report dealing with all strategic issues in your business.