Is a Business Plan really Worth the Time and Effort?

Do you Really Need a Business Plan?

You may not be convinced that the time and effort needed in preparing a plan is essential; if this is the case then the following are the main benefits to you and your business.

Vision and Clarity

Even if you have excellent communication skills, you may never be able to convey your vision for the business as successfully as a perfectly put together Business Plan.

A business plan provides a clear understanding as to what you want to achieve. It allows you to express your ideas in a clear and structured manner.

A clear and well written Business Plan will help convince both you and the Bank of the project’s feasibility and viability. There’s nothing like having all the facts in front of you to clarify the key issues.

Organisation

During the business planning stage numerous ideas are floating around in your mind. Unfortunately, the pitfalls or stumbling blocks to success are never that visible. It is difficult to achieve clarity with a mind constantly bussing full of thoughts and ideas.

The result of this could be you going in a completely different direction than you initially thought of. Or even worse abandoning your idea altogether.

A Business Plan forces you to put your ideas down in writing and in an orderly manner.

Alignment and Progress

It is an ideal tool to monitor progress against the objectives you have set yourself. By checking your progress against the Plan, you will be able to spot if you are moving away from your original vision. If this is the case you will know what has to be done to put you back on the right track.

Every action you take has a consequence, and a Plan helps make these consequences much clearer. Being aware of the possible effect of your chosen direction allows you to plan ahead and take calculated risks.

This will leave you better able to cope with whatever the world of self-employment can throw at you. This is one thing that “mental planning” would not achieve

Understanding your Market

Putting your thoughts on paper may make you realise that you need to do more research on the demand for your product or service.

This exercise may also highlight that further investigation on your competitor’s products or services is required. This additional research may help avoid a potentially costly mistake, or even uncover a hidden advantage which you had not seen before!

Confirm the Figures

A Business Plan will guide you as to how much money is needed to make an idea work. In your mind you may have a rough figure of what you’ll have to commit.

Until you actually do a Cash Flow Forecast you may not realise that an overdraft limit may be required, and a loan for your equipment.

Capital and Funding

A Business Plan will help you get funding. One of the main reasons banks turn down requests for loans is a lack of information.

If the Bank Manager doesn’t have enough knowledge about your idea or business then they won’t feel comfortable enough to support you. A clear and concise Business Plan provide the information needed for a decision to be made.

Understand your Business

By the time you have finished writing your Business Plan you will have a total understanding of your business; its strengths and weaknesses, the environment it operates in, what could potentially go wrong, and what you can do to ensure your success. Doing your planning on the back of an envelope is not going to achieve this.

Spend time putting your thoughts on paper in a structured and logical manner. It will pay you dividends, both in getting the Bank to take you seriously and securing the future of your business.