For anyone starting a small business, there is no shortage of advice on what steps to take. Starting from registering your business name, getting permits and licenses, tax ID, deciding on a business structure, etc.
While these are all essential steps to take, a business plan will be central to how you start, grow, and develop your business.
Entrepreneurs starting out and forming their own company, whether it’s a small freelance business or a new venture with another office and a starting pool of employees, there is a lot of importance in having a business plan.
A business plan is a road map, an outline, a document that explains what your business is all about. It details what your goals are, and how it will go about achieving those goals. Beyond being a document that identifies your business, what else can a business success planning do in helping you grow your business?
Not every successful business launches with a formal business plan, but many business founders find value in taking time to step back a bit to study their idea and the market they are looking into to enter. They take the time to understand the scope and the strategy behind their tactics. This is where the need to write a business plan comes in.
Developing business plans allow entrepreneurs to take their visions and turn them into action plans that will lead to success. Here are five ways a business plan can help your business grow.
1. It can help get funding.
Most investors will want to see a business plan before they even consider and decide in funding your business. A business plan can help you obtain funding or attract new business partners.
Having a business plan helps investors feel at ease and confident that with a sound plan, they will see a return on their investment. It is your tool that you can use to persuade others that working with you, and investing in your business, is a smart decision.
A business plan shows that you provided for the structure and confidence needed to make decisions about funding and supporting your company.
2. Organise Your Resources.
A business plan is an essential document that also serves as the primary guide for how you will structure and allocate your resources. It outlines how feasible it is to open an office, hire employees, and to look at and allocate operating costs.
Growing a business requires the deployment of resources in a manner that maximises revenue. Planning helps a company avoid making poor strategic choices, such as wasting resources on entering markets where competitors may have an unsurmountable advantage.
A business plan plays a major role in the allocation of resources throughout a business. It can also be used as a tool that can help you attract new sources of funding, or that you can be uses as a strategy document.
A business plan can quickly show you whether your business will turn up profits or operate at a loss at the early stages of operations.
3. Helps in Making Sound Decisions.
A business plan helps you in defining and stay in focus in executing your business ideas and strategies. It not only keeps your sights on financial matters, but also on management issues, human resources planning, technology, and creating value for your customers.
Having a business plan helps you identify potential pitfalls in your ideas. You can also share the plan with others, who can share with you their opinions and advice on how to avoid these pitfalls.
Think of a business plan as a GPS in getting your business going. A good business plan helps in guiding you through each stage of starting and managing your business.
A business plan details how to structure, grow your business, think through and detail all the key elements of how your business will run.
4. Helps in Reaching Business Milestones.
Having a well-thought-out business plan helps you to step back and allowing you to think objectively about the key elements of your business. Milestones are goals that you set for your business, complete with dates and the people responsible.
Milestones are your guide rule that you use to convert your business strategy and tactics into action. They track your progress as you grow and implement your plan. Milestones are what you use to manage responsibilities, track results, and convert your ideas into a functioning business.
A business plan should clearly lay out long-term milestones that are vital to your business success.
5. Helps you Better Understand your Competition and Customers.
All companies and businesses have either direct or indirect competition. A business plan forces you to analyse your competition that is critical in understanding your company’s competitive advantages. If you currently have no competitive advantage, it helps you figure out what course of action to take to gain them.
Additionally, creating a business plan helps you in gaining a wider, deeper, and more nuanced understanding of your marketplace. This helps you make sound decisions to improve your company’s success.
An in-depth customer analysis is essential to an effective business plan and to the success of a business. Understanding your customers allows for you to create better products or services for them and allows you to outlay a cost-effective budget to reach them thru advertising and promotions.
A Business Plan is a Living Document
A business plan is commonly known as a “living document.” Reason being plans are constantly changing.
Several factors affect this, such as: developments in competition, new marketing tools, or legal factors or regulations that impacts a business. To be able to cope, remain competitive and relevant, business plans must be updated and continue to evolve.
Take your first steps to business success and let’s grow together. The Growth Manager is here to support you with our business templates that you can use in helping you grow and streamline your business processes.