Friday, September 20, 2019
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Why you need a business plan

A detailed business plan can be the key to your success. Starting a business without a plan is like embarking on a journey without a destination. You waste time, money and resources, and every effort to succeed might prove abortive.

What a business plan does is to help you plan your business by questioning the validity of your ideas and motives. It is an important bench-marking tool to articulate your vision, strategize, monitor progress and achieve both short and long term goals as an entrepreneur.

Sean Hackney, co-founder of Roaring Lion Energy Drink, back in year 2000 never dreamed of growing a company worth about $6.2 million in Sun Valley, California. It all started with a plan having left Red Bull North America Inc for better opportunities.

Today, Hackney’s Roaring Lion Energy Drink ranks among the top #3 energy drinks in bars and nightclubs around the world. His encouraging testimony about having a plan back then was “absolutely worthwhile.”

A business plan helps you review everything you want to achieve from positive brand image to financial plans, staffing and employee volume, value proposition, operational plans and marketing hypothesis.

Braylen James says a good plan clearly defines the marketplace, competitors, suppliers, pricing, industry, customers, operations and many other crucial aspects necessary for planning optimal growth for business. It gives you a bird-eye view of where your business or organization currently is and where it intends to go.

Just as the success of any business hinges on effectual planning, the importance of a good business plan cannot be over-emphasized.

business plan
why you need a business plan

However, present reality has given voice to arguments on the relevance of a business plan. For some entrepreneurs, a business plan is an outmoded document that gets created mainly for the benefit of bank loan officers. Albeit, it is undisputed that securing funding from commercial banks, government-backed lenders and other investors always requires a formal plan compared to firms funded by friends and family that doesn’t.

The truth remains that just a one-page plan is a valuable road map for success. William B. Gartner, an American Professor of entrepreneurship discovered that writing a plan greatly increases the chances of a person going into business. As in the case of Hackney who was driven by a plan to start a business even when he had no intention of doing so.

What Else Do You Benefit From A Business Plan?

For Startup

  • It provides an opportunity to think through every aspect of your business, troubleshoot needy areas and to evaluate success before taking any action.
  • It helps in identifying company’s strengths, weaknesses, opportunities, and threats (SWOT).
  • It aids to secure funds from lenders and investors.

For Growing Business

  • A plan ensures the establishment of a timeline for transition to a larger business model when the need arises.
  • It aids in identifying financial and regulatory requirements.
  • It is useful in evaluating company’s growth, leading to an informed decision in developing and executing effective development strategies.

For Existing Business

  • A laid out plan helps to communicate a company’s vision to employees, partners and stakeholders.
  • Accurate financial forecasts could be developed through a well detailed plan.
  • It makes evaluating plans easier in comparison with actual performance and results.

You could hire someone to write a business plan for you or do it yourself. Whatever direction you choose to take, developing a business plan entails research, detailed consideration and exceptional brainstorming. A key point to remember is that a wide gulf separates having a formal written plan and having no plan at all.

Every business has to start with a plan. Even a holy book advises that one mustn’t begin a project without counting the cost. “…For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it?”

However, the nicest thing about not planning is that failure comes as a complete surprise. Then, you are left with regrets, disappointment and sometimes with no choice to do exactly what you should have done in the first place.

Now that you know why you need a business plan, the time to start planning is now. It is never too late!

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