It’s a common mistake to make.
Many people skip writing a Business Plan, because they consider it to be too much of a hassle.
But if you run your own business, are looking to start one, or are in charge of a significant section of a corporate organisation such as a department, group of departments or region, it is worth making that investment of time and effort upfront.
If you’re still procrastinating about getting yours done, here are 4 reasons why you need a Business Plan:
1. A Business Plan Clarifies Your Intentions
Many businesses waste time and money pursuing vanity projects that have no alignment with their actual goals and targets.
It’s easy to drift and get distracted by shiny objects when your business intentions aren’t clear.
The sections in a Business Plan about “Mission” and “Objectives” will help focus (or if necessary, re-focus) your mind on the purpose of your business, and what it has set out to achieve.
For example, if your business is a tech start-up you’ll clarify exactly what you aim to achieve in the coming weeks and months.
You will refer to it regularly to make sure that everything you do – your marketing, sales and growth strategy, PR and social media – matches up with what you’ve set your business up to do, and the people you want to reach. It will serve as an effective way of keeping you on track.
2. A Business Plan Prompts You To Carefully Consider What Your Customers Need
Business Leaders and Entrepreneurs tend to be adventurous and creative; always pushing boundaries and aiming to achieve more.
Left to your own devices, you could easily dream up a warehouse full of cutting-edge products and services. But…
…is anyone out there asking for them?
Does anyone need them?
Do your products and services recognise and directly address key pain points of the demographic you are looking to reach?
A well-written Business Plan prompts you to ask (and answer) important questions about existing and impending customer demand, and how your products and services will meet them.
3. A Business Plan Helps You Zero In On Your Target Market
A good Business Plan will have a section on your target market.
And apart from the obvious bit about who your products or services are designed for, it will prompt you to analyse and detail crucial aspects such as the current state of the market, how it could change, upcoming trends and any gaps in the market that are just waiting to be filled.
So, is the market thriving?
Are your products and services the sort of things that people would spend money on?
Or, are things in a bit of a decline, and are budgets on products and services such as yours starting to get cut? (Note that this isn’t necessarily a bad thing! It just means that you can prepare and adjust your business model accordingly).
Are there any changes afoot? Any upcoming regulations that will have an impact on how you operate or interact with your customer base?
A good example was the General Data Protection Regulation (GDPR) which took effect in all European Union countries in May 2018, and required all businesses to implement new data protection and privacy processes complying with the new regulations by the deadline.
The work involved to do that was significant, and businesses had to incorporate this into their plans and budget in the lead-up to that date.
Researching and knowing such aspects will help you position your proposition in the best possible way, and make the most of any gaps in the market that are not served by your competitors.
4. A Business Plan Forces You To Plan For The Money
This is the section of Business Plans people struggle with the most!
It’s also THE most important part.
How else will you know how much you should aim to make as a minimum to cover your costs each month, and how much cash you must have in the bank to keep your business running as a result?
Ignore the finances, and you could soon end up in dire straits.
Do You Have a Business Plan?
And don’t forget that a Business Plan is a living document; it’s never “done”.
As time goes on you may gain more clarity on different elements and you can adjust them to be more specific, or to reflect changes in your business or the general landscape.
Also, it’s something you need to review regularly, since your Business Plan is meant to guide you and help you track your business activities and key metrics throughout the year (I recommend a quarterly review).
With respect to small and medium-sized businesses in particular, I did a straw poll and was interested to find the majority did not use a Business Plan for their planning and forecasting.
Is that the same for you?
What To Do Next About Your Business Plan
If you need help with your Business Planning, I have designed some tools that can help:
The first is a One Page Business Plan Template.
It’s short and concise, while containing all the essential elements you need in a Business Plan.
And in addition, it contains helpful prompts which will guide you along the process.
You can buy and download your copy of the One Page Business Plan Template here.
The second is a comprehensive Business Plan Template, which contains all the sections and details you would find in a typical Business Plan such as the Product & Service Range, Target Audience, Market Analysis, Milestones & Metrics, and Financials.
Similar to the first template above, it also has helpful prompts to guide you as you complete it and produce your Business Plan. You can buy and download your copy of the Business Plan Template here.
And finally, I provide a done-for-you Business Planning Service.
If you would like to produce your Business Plan but can’t commit the time to do it yourself, you don’t have to worry! Contact me about my Business Planning Service, and we can arrange to get started on yours as soon as possible.