Why do you need a business plan?
Do you want to create a new business venture? Do you have a business idea but don’t know where to start? Have you started your business without a plan? It is time to create a business plan! A business plan is like a travel itinerary, you need to plan your trip before travelling: Where you will go? How to reach there? How much will you spend? Where will you stay? What will you do (activities)? Which places will you visit?
The business plan has the same function for your business regardless of the stage. It is a living document that you should review and update often as external and internal factors affect your business. It is a roadmap that allows you to build a strong foundation for your business.
- Guiding you every step of the way: it is a roadmap that includes important aspects of your business to plan, as well as an action plan and milestones to be monitored. You will be able to define goals, develop strategies to achieve them. It will allow you to see the bigger picture and keeping in mind the 'Why'. You will also define your mission, vision and values to define your purpose.
- Helping you improve your decision-making process: You will define your core competencies and competitor analysis to improve your offering, create a new product/service or buy new equipment. You will need to create a financial plan, to know when you will break even, estimating your costs.
- Testing the viability and feasibility of your business idea: by studying the cash flows, the operations, the market… You need to build a strong business model to ensure success.
- Strategising on tackling opportunities: You will find new opportunities by using SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. You will be required to develop a strategy to tackle those potential opportunities. You will generate new ideas, improve your offering by conducting brainstorming sessions.
- Monitoring your competitors to improve your products/service: list all your competitors and look at their offerings, their pricing and compare with yours. It would allow you to gain a competitive advantage over your competitors and offer a unique proposition to your customers.
- Preparing for the unknown: by looking for trends and external factors that could affect your business.
- Analysing and mitigating the risks: You can analyse and manage risks; by looking at different ways to reduce their impact, or to avoid them. The risk management analysis allows you to manage and to mitigate risks that will affect your business (operational, market, and financial risks, among other risks).
- Funding opportunities: If you are seeking investors to fund your business ideas, you will show potential investors that you thought your business idea through. It will also show them where they would invest in and what they will get in return (financial plan).
Are you afraid to fail? Are you unsure how to start your business? Or how to grow your business? Build a business plan now!
Although it is time-consuming, it is vital to have a plan that can be reviewed, and updated frequently. You will be able to look at your current state and compare it with your business plan, and see where you have reached. It will help you by analysing your financial plan, operational plan, marketing plan… It is a roadmap to reach your destination while managing obstacles. It is never too late to build one.