Some business owners have planned such a clear path for the future, they wonder why others are so hung up about writing a business plan.
After all they have it all in their head – their vision, objectives and goals – so isn't that enough?
The short answer is NO, it isn't enough. Even if you're so busy with your work, rigidly following that path for the future, you've still got to write a business plan.
In fact writing the business plan is one of the first things you need to do – before you set-up in business.
So, why is it so important? Let's look at some important reasons.
One of the essential ingredients that goes into the planning process is good, critical thinking. Before you write anything you've got to think through what you intend to do in your business and how you intend to do it. If you're just sitting down to write your plan after several years in business, you need to think about what you are doing currently and what you intend to do.
We can help provide a list of all the things you need to cover in your business plan, or you can find helpful books in the library. For example, you'll need to include information on industry and market analysis, customers, environmental factors, financials, competition, marketing, advertising, as well as plans for sales, distribution and staff development. And that's just the short list.
Writing a business plan is a big task, but because the plan encompasses everything about your business operations, it's a vital document. Operate without one and you may start taking some wrong turns along your pathway.
On the other hand, by committing all this thinking to paper you are setting a well-mapped course for the future of your business.
Monitor the Deviations
Once you have your plan in place you now have a tool to help you compare current performance against what you wrote in the plan.
Follow-up is important with your business plan. You haven't written it just to throw it into the filing cabinet and forget about it. You do need to check in with your business plan regularly, maybe monthly, to make sure your business is still on course to reach your planned goals.
Securing a Loan
Banks and financiers love business plans. If you apply for financial support they will want to know you have a business plan and are operating to it.
A plan shows them you are serious about your business. It also states that you have planned your future direction and how this will be achieved, and, importantly, that you know how the loan is going to be repaid.
A properly-prepared loan application with supporting documentation is likely to be much more successful than a verbal or badly-prepared one.
Involve the Team
Several heads are better than one when writing, or updating, your business plan. You might be leading your organisation and have a vision about where it's going, but your employees probably have a wealth of great ideas. Don't overlook them. Your job is to bring the ideas to the table and give people an opportunity to discuss them.
Involving the team can often result in more effective implementation as they own the ideas and are more willing to implement the plan. The teamwork approach can also spark a lift in morale.
As well, the business planning process focuses the team on big issues, such as looking at future developments for the company or enhancing services to customers. By reviewing the "big picture", you are making decisions based on analysis of the business in its entirety, rather than a piece-meal approach of decision-making forced by crises.
"…there are oodles of studies showing that businesses that write business plans have a much better chance of being lean, mean and successful, generating higher sales, more profit and better growth." Small Business For Dummies. Veechi Curtis
For more information and assistance with your business planning contact us today.