Business plans are a necessity for starting a business or ensuring business longevity. Business plans allows business owners to effectively plan for success, organise their business and determine their business goals. Business plans are vital to ensure growth and sustainability of a business and to ensure the business has future goals and achievements.
Below answers the important question “Why do I need a business plan?”
Do you want to expand your business, be more competitive in your industry or achieve certain goals?
If you answered yes to any of the above, you need a business plan!
Whether you’ve just started out or been running for years, business planning can be the key to your success.
Here are 3 key reasons as to why you need a business plan:
- Business Plans will help get loans from the bank
If you’re seeking finance for your business, you’ll need to show banks and investors why they should invest in your business. A business plan will help in providing evidence as to why the bank should lend you money. Banks wants facts, goals and forecasts before they loan you any sort of finance.
If you are looking for investments from third parties, a well-structured business plan will help provide more clarity for the investor and will help them with their decision to invest in your company.
A thorough and well-researched business plan should include the following:
- shows your goals and future aspirations
- Educate investors and lenders on your business structure
- Include future forecasts and estimated profits for your business
- Include a detail marketing plan on how you propose to attract customers and market your business
- Business plans provides clarity for you own goals
A complete, thorough business plan is one of the most valuable tools in helping you reach your long-term goals. It gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible problems later on.
Preparing a business plan will help you work out the goals you want to achieve, and the strategies to achieve them. This means you can focus your resources and energy on what you need to do, rather than spreading yourself too thin.
Once you’ve got a business plan in place, it’s a good idea to regularly review and update it to:
- remind yourself of your goals and priorities and see if you are achieving them
- assess whether your strategies are working, if not adapt and change them
- make the most of new opportunities as they come your way, always be willing to innovate
- Business Plans helps establish order in the workplace
Developing your business plan helps you to step back and look at what’s working in your business and what you can improve on.
If you have employees, the planning process can be a good opportunity to seek their feedback on possible ideas and improvements. Your employees will value this opportunity to contribute to the business. Business plans also outline who is in charge and whom employees can talk to about their opinions.
Taking the time out of your business to plan will give you a sense of control about the future of your business and pay off in the long run!
Business planning can seem overwhelming and time-consuming, but many successful businesses look at it as an opportunity and ensures longevity for your business.
The planning process helps you learn about the different forces and factors that may affect your success. If you’re already in business, it helps you to step back and look at what’s working and what you can improve on. Instead of worrying about the future, a business plan helps to give you a sense of control over your business and your livelihood.
Developing a thorough business plan allows you to:
- Learn about your industry, market and competitors
- write down exactly where you are in the market and where you want to be
- Identify challenges you may come across and work out strategies to avoid or overcome them before they occur
- Understand your business finances, including managing cash-flow and determining your break-even point, also helps with investing profits back into the business
- Set specific goals, timeframes for achieving them and how you’ll measure performance indicators
- Make sound business decisions that focus your activities, maximise your resources and give you a competitive edge.
- Constantly innovate and come up with new ways to operate to better the business and generate more growth
To write an effective business plan you’ll need discipline, time and focus. Although the process can seem challenging, it’s very rewarding and gives you a sense of control over your business. It provides clarity for all investors and stakeholders and ensures that you know the reality of your goals and future aspirations and helps in achieving them.
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- Write down on a piece of paper what your goals for your business are and where you see the business in the next 5 years
- Plan how you will achieve those goals
- If it’s purely financial investments, seek out a trustworthy investor or get advice from a qualified accountant
- If it’s staff and needing a management team, post an advert on a job listing website
- Make sure your goals are realistic, backed up with evidence from your current operations and start planning today
Being proactive about a business plan and be willing to modify and review it constantly will help to provide clarity for your business and assist with investment opportunities, so you business can grow and prosper.