How a business plan sets you up for success
A business plan is a written description of your business’s future. It details what you plan to do and how you plan to do it. It’s your blueprint, just like the architectural plans you need to build a house. You wouldn’t begin laying foundations without detailed drawings, and nor should you start a business without a plan.
While writing a business plan is a time-consuming process, it’s a fundamental tool for surviving your business’s start-up phase. And, if you don’t have one yet, it’s never too late. During your business’s growth phase, and even during the challenging times, your plan helps you forecast or raise capital for growth, or create a strategy to exit your business.
In addition to what you do and how you do it, your business plan should include your strategy for improving your existing sales and processes to achieve the growth you desire.
4 Ways your business plan will help you succeed
Test your business
One of the benefits of writing a detailed business plan is the opportunity to fully research your idea. Part of your business plan includes analysing your strengths, weaknesses, opportunities and threats, which naturally leads you to thoroughly research your competitors.
With this valuable information in hand, it may be that your idea doesn’t have the legs you thought it did. Before you spend any time and money or resources on launching, you can discard the idea and move on to something else. However, if your research reveals an untapped market and the scope to grow, you can confidently go ahead.
Plan for success
Another element that needs to be included in your business plan is a detailed budget and marketing strategy. This overview of your operational and financial objectives will help you define your target market, outline your unique selling proposition, define your pricing strategies, and determine how you’ll sell and deliver your product or services to your customers. You’ll also establish what start-up capital you’ll need.
For start-ups or more established businesses that require funding, a well-constructed and thought-out business plan will be required by financial institutions or investors before they’ll consider giving you a loan or investment. If they’re unable to determine the risk and return of backing you, it’s unlikely your application will be considered.
Both your business and your business plan are dynamic. As your business grows, your focus may change, your market may alter, or economic factors may bring some unexpected pressure. As you revise your goals and operational activities, so you’ll update your business plan to reflect these. In this way, you’ll be able to chart progress, get an idea of when you need to change course, and generally have a useful tool at your disposal to help you make better-informed decisions.
Review and refocus
Once you’ve created your business plan and you’ve put it into practice, keep it handy. Review it regularly to note your progress. Are you achieving your objectives? Are there signs of promising areas to grow?
Your business plan cycle is a continuous process. You may choose to review it quarterly or more frequently, but importantly it should always be evolving. When internal or external conditions change, pull up your business plan and review your strategies and objectives.
Setting up your budget and financial objectives is not just complex and time-consuming, it also needs to be right. At Counteractive we have the expertise and experience to help you anticipate everything an investor or lender will want to know.