You can wing many things in life, but not your business
Being an entrepreneur requires that you take chances and find gaps in the market. But that doesn’t mean you don’t need a business plan!
A business plan is part of your enterprise strategy. In essence, it is the very structural bones or foundation of your business.
While your business will evolve over time, and certainly you need to be adaptable to changing circumstances, a solid business plan at least puts your plans into place so that you aren’t flying blind.
In this blog, we’re sharing the advantages of having a business plan and how it can benefit your long-term business goals.
What is a business plan?
Let’s take a quick look at what a solid business plan is. There’s no need to create a 200-page document that requires a PhD to understand.
Rather look at it as formalising all the plans you have for your business in a logical sequence.
The core component of a business plan is detailing exactly how your business will make money. Then you can flesh out all the other pertinent information. Your business plan is the structural layout of your business goals.
It will also cover:
- Finances and funding
- Marketing strategies
- Execution processes
It should also include detailed steps taking you from start to finish. Think of it as your “to-do list” for your business.
Once everything’s in place, you should be ready to present your plan when networking, applying for a loan or trying to secure external investment (should you require it). Of course, you should also revise your plan when needed. Sometimes a strategy could be working now, but because it was a “hot” trend at the time, but it may not work the next year.
Revising your business plan annually will help you to reinforce new strategy measures suited to the development of the market on a larger scale.
Research and updating your knowledge of the market is vital.
Why do you need a solid business plan?
A business plan formulates the key components of how your company will run from the bottom up. It also details your growth objectives and the plans you intend to implement to achieve your growth goals.
Use your enterprise plan to tackle internal and external structures thoroughly. As we will mention a bit later, this could help a business improve dramatically, depending on the plan. These are customisable to suit business needs.
Find structure to your goal
With a plan in place, you can work on how you’ll execute your business goals. Any hiccups you come across in the planning process can be addressed at the same time.
You can also use it to assess the type of goals, are they reasonable, do they meet the necessary criteria, and what will you need to do these?
You’ll avoid massive mistakes
When starting out as an entrepreneur, the planning process is crucial. But there are also chances of running onto snags.
To make sure there are smoother sailing predictions, planning will help highlight any potential mistakes or shortfalls. You might realise that you are under-resourced in terms of personnel. You might have to decide whether to hire staff or get by with freelancers.
It also gives you the chance to check the market, find income sources and study your competition.
You’ll also have to take marketing into careful consideration. Will you use networking or traditional forms of marketing?
Or will you realise the massive power of social media and invest in paid digital marketing?
It may help you to sell your business
You probably arent’ thinking of selling your business right now, after all, you’re probably right in the middle of getting it off the ground or growing it. But… sometimes people decide to sell their business. And if that happens to you, having a solid business plan in place is invaluable when it comes to negotiating the sale.
Share your plans with key stakeholders
Important members of your business should have access to your business plan. These include your legal representation, shareholders and partners.
Boost partnerships
If you’re done going solo and are ready to take on partners or investors, having a well-crafted BP will go a long way to show them that you are a worthwhile investment.
Get help from others
It’s often hard to get a company running without any finance to back it. You need a plan to help make this possible as it will represent the future or vision of your company.
Potential investors need to see the “BP” as it will provide clarity before investing their money and time into a course.
Improve current operations
Since the “BP” is the core structure of your company, you can go back and discover ways to revise the strategy throughout.
In this way, you can improve business on all levels of your company.
Even a small business can benefit from a solid business plan.
Lower the risks
With a much-needed plan in place, it can help create better planning and by doing so lower the risks involved. It ensures that all the groundwork is covered. This includes solving problems before they even happen.
Manage your business finances
Knowing where your money goes is important for any business undertaking. With a solid business plan, calculations should cover future expenses. These include purchasing costs, assets, costs to pay staff and daily expenses, to name a few.
Form structure with your industry plan
Another reason you need a solid business plan is to formulate and maintain structure in your business. You can use it throughout the various departments. This can also help with time management strategy, goal achievements, meetings and reminders.
Have your business priorities in place
Prioritising is important to business success and structure. Part of being realistic is prioritising tasks because it’s not possible to do everything alone. Sometimes you need to acquire help and professional know-how, to assist with specialised tasks.
These allocated tasks could be anything from accounting, social media management, content creation, and more. As a business owner, you may not possess the experience required to master these vital aspects. Working with the help you need could prove to be beneficial to your company.
Does my business need a plan?
After analysing the importance of having a business plan, it is clear that no industry should be without one. While some start off without a system, other entrepreneurs may develop a plan later.
So, does your business need a plan, even if you run a company of one?
Yes!
Tips on creating a solid business plan for your company:
Understand and recognise your audience
If you know who the audience is, then you’ll be able to speak to them and have more direction and focus.
What are your business goals?
Where do you see your business in a few years from now? Plus, think about how it will solve people’s problems or provide the services needed. How will you solve their problems? What processes can you put in place to streamline the customer experience and simplify tasks?
Get expert advice
If you have no idea what to include in your business plan, do some research. At the very least, you should include:
- Executive Summary of Information
- Company Description
- The opportunity, Industry and Market
- The Business Strategy
- Management and Operations
- The Marketing Plan
- The Financial Plan
Take a look here for more information.
What’s your business plan type?
The following is only a summary of the typical business plan types and their functions to some extent. Your plan has to describe all the details and this will depend on how old or new your company is.
- Startup plan – describes the company, the strategy, goals, cash flow and marketing endeavours.
- Internal business plan – this focuses on operational costs in the already present business, what funds are needed and how will the loan to boost the plan be repaid.
- Strategic plan – again, this pertains to an existing company looking to improve their operations and strategy. It will therefore focus on the current operations and how this will help improve. Goals and missions will be re-evaluated.
- Operations plans – this idea focuses on the existing business’s goals to complete or execute strategy.
- Growth business plan – this plan re-evaluates the company’s current status and financials. It may focus on a strategy for investment and support from external sources.
The takeaway on the importance of a solid business plan
Without a “BP” it’s like going on a blind date because you have no idea what the person looks like or how you could navigate the situation. Going into business without a plan is like being unprepared for battle and competition.
While it’s incredibly important to be agile in an ever-changing world, it’s also important to plan for success.
The more you perfect your business strategy, the easier it is for your company to reach important goals and expand in the market.
