2 August 2019
In the many years that I have been helping and working with businesses to develop, scale and grow, I have met both people who have their business plans clearly defined and people whose ‘preparation’ is only in their head.
In the words of the famous Statesman, Scientist and Inventor, Benjamin Franklin “If you fail to plan, you are planning to fail”.
Now I know that no business has an intention or aspiration to fail, so the question is how important is it for your future success to capture the great ideas in your head and write them down in a clearly defined plan? It has been proven that when you write down your goals, you are more than likely to achieve them. Here’s 7 reasons why it’s important to have a business plan:
1. Business planning gives you a clear vision of how to achieve your future aspirations. This will create a road map. When you have a map of where you want your business to go, you are much more likely to achieve success.
It’s the same as when you embark upon a journey, plan where you are going to go, to ensure you arrive at your desired destination. Without this, you may go in the wrong direction.
Plan, and you will achieve your objectives and goals.
2. Your business plan is your blueprint. When writing a business plan, you need to begin by outlining your history and experience, alongside the reason ‘why’ you are in business, your passion.
Writing your ‘why’ will give you further clarification on your business idea, as well as helping you to clarify your short, medium- and long-term objectives.
3. In your business plan, you will produce a competitor analysis and work on or clarify your unique selling propositions. This will ensure that your business stands out from competition. From this you can define who your target audience is and produce a clear route to market.
Your route to market is key to your success.
4. Your business plan will become an indispensable management and planning tool. After you have set your vision, analysed your market, identified fluctuations in the business, set your business objectives, realistic cash flow and revenue forecasting can be developed. From this you can set the benchmarks and measures for progress and success.
5. B.C Forbes, the Founder of Forbes states that “if you don’t drive your business, you will be driven out of business”. Your plan is the road map. You now need to drive your business in the right direction. This will mean working ‘on’ your business and keeping it on track while having a clear understanding of how to take your business to the next level.
To secure investment, you will need to demonstrate your map for success.
6. When you need to access funding or investment, lenders or investors will need to see realistic forecasts and that future plans have been well formed and thought through. In your business plan you will have analysed the key factors of success, whilst identifying risks and providing solutions through a commercially viable plan. It is my belief that these days with a constantly changing environment, a business needs more than a plan. It also needs the right strategies in place.
7. These will ensure that you execute your plan effectively. Forecasting, whilst anticipating future market trends and changes in the environment and technology, will prepare you for changes you may need to make. Strategising intelligently will keep you ahead so that you are a leader in your field.
So, objectives, vision, competitor analysis, route to market, unique selling propositions, benchmarking and measures, well-formed forecasting, directional mapping, leadership, strategies, access to finance are all part of a well thought out for business plan that will keep your business moving forward to achieve goals.
For advice on putting together your business plan, please contact SEMLEP’s Growth Hub here.