Thinking of starting a new business or perhaps you have already taken the plunge. Maybe you have already started a business but don’t have a business plan, then I would suggest writing a business plan AS SOON AS POSSIBLE.
Why? Because if you don’t have a plan how can you measure your success? How do you know where you are taking your business? How can you convince investors, friends, or family to invest in you?
A business plan is so much more than loads of words to keep the bank manager happy or just to satisfy yourself.
What is a business plan?
Imagine this, we meet for the first time, I don’t know you, you don’t know me. I ask a simple question “what is your business?” you begin to tell me exactly what your business is. You tell me with passion all about your successes, how you started, who your customers are, and what plans you have for the future, and how you plan to achieve your future goals, this is effectively your business plan. You may not have it written down on paper, but you know what your business is and what you want to achieve with it.
Now think about it like this? You need a bank loan or you need an overdraft facility to continue growing your business or to even get your business off the ground. Do you think that turning up to the bank and seeing the commercial manager without a business plan, they will want to invest in you? The short answer to this is NO. A business plan will give them confidence in you, and you understand how you plan to grow your business. At the end of the day, they don’t want to lose their money.
What is included in a business plan?
A business plan is a fairly straightforward document. A good business plan must be easy to read, clear, and concise. A good business plan will have the right amount of detail and include information on all aspects of your business; including background information (executive summary), the opportunity, your plan of execution (sales and marketing plan), financial situation, and funding required as well as personnel and various operating procedures. Think of it like this, if your partner, grandmother, or potential investor picked up your business plan, they will have a very clear understanding of what your business is, why it will be successful and how you plan to grow and fund your business.
What is a business plan used for?
The purpose of a business plan is many fold, however, one of the main reasons for a business plan is often to give you the business owner clarity. Clarity and vision can only be achieved by thoughtful insights into your business for example asking questions like “What are you are doing?” “Where are you going with the business?” “How do you plan to achieve your goals?” “Who are your competitors?” “What are they doing better?” “What can you do better?” “Do I need staff to achieve my goals?” “How are my finances?” By asking these questions will give you a better understanding of your business.
A business plan is often used to raise funding to take your idea to reality or achieve the next round of development and growth. To raise funding whether its the Bank Manager, Friends, Dragons Den, Crowd Funding or VC’s you will need a business plan.
What are the 3 main purposes of a business plan?
- Business Clarity
- Securing Outside Financing.
- Validate & Map Business Growth
Why do business plans fail?
Businesses fail for many reasons. Here are 5 common reasons:
- Failure to understand the opportunity or lack of.
- Financial Management.
- Lacking the necessary skills to grow the business.
- Not embracing technology
- No sales and marketing skills
For further questions and answers regarding business, plans check out the FAQ section.