Businesses get started every day; some fail and some go on to succeed beyond all expectations. So what is it that allows a business to do well? One of the core values of a business should be a business plan, if you ask yourself the question, do I need one, the answer should always be – YES!
Here we give you our top tips for why you need a business plan.
1. To discover the feasibility of your business
You may think that your business idea sounds great in theory and will make you millions, but when you start piecing bits together into a business plan you will start to see if that ‘great idea’ can actually be turned into something better. The plan allows you to look at the competitive landscape and review whether there is space for you.
2. To reduce risks
Out-laying your plans at the beginning of a venture – where you see the company going and how you are going to get there allows you to stay focused and on track. Reducing the risks that you will go off course and the business will fail.
3. To evaluate the success of the business
As well as reducing risks and having all your ducks in a row, a business plan allows you to evaluate as well as project. It provides a benchmark to measure the business against and how well you are/or are not doing, allowing you to make amends to stay on track.
4. To plot the course of your business
The business plan serves as a roadmap from which your business can operate. Without a business plan you may have short-term success, but longer term fails.
5. To position your brand correctly
We have mentioned many times before how important brand is to a business in positioning yourselves in the right market space and to drive the success of your business. Therefore it is important that your business plan exactly how you want to be positioned and how you will get there.
6. To detail your marketing activity
So for your business to be successful you need customers in some form or another – so how do you intend to communicate with them? How much budget will you assign to communicating with your audience? A well planned marketing roadmap is essential for growth.
7. To determine your financial needs
The most important aspect of your business plan is determining your financial needs – how much investment will you need to get the business off the ground, how much money will you need to grow the business further. Without a business plan you would simply be plucking numbers from thin air.
8. To document the revenue projections
You need to make projections for the future, to have aims as to where your business is going. How will your business make money and grow? Having projections allows investors and financers to see where and over what time period you expect your business to develop.
9. Show your bank that you mean business
Again that great idea won’t get you anywhere unless you have a business plan to explain to potential investors and partners what is in it for them, and you certainly won’t get any financial loans without one!
10. To attract investors
As with the other main points detailed here, it is vital that you have a business plan to attract investors. Investors will need to be assured that they will make money on their investments and therefore this needs to be detailed in a business plan. The more detail you have, the greater projections you have, the more attractive your proposal will be to future partners.
So the importance of a business plan is evident for the success and growth of a business. How important is your business plan to your business?