If you thought having a documented business plan was unnecessary, think again.
Having a business plan is vital to the health of your business as it describes your business goals and objectives and a guide to achieving them. With a business plan in place, you have a clear vision of the short and long term success of your business. In short, it is your roadmap to success.
It is commonplace for small business owners to undermine the importance of this exercise. The result of this oversight can range from making short term losses to a total shut down in business activities. This is why you should not waste time thinking but start developing your business plan. A business plan helps to:
It helps to give clarity on set goals and objectives and the resources required to achieve them. Do not forget that it is your roadmap to success, therefore you shouldn’t just abandon it after creating it. Be open minded and work on it from time to time to reflect the changes and growth your business undergoes.
Gain a deep understanding of your market
By analysing the SWOT (Strengths, Weaknesses, Opportunities and Threats) of your business, you gain an in-depth understanding of the market and industry in which you operate and how your business can fit into it. This enables you to determine if you need to re-strategise or reinforce existing strategies to move your business ahead of your competitors.
Make good business decisions
It allows you to develop financial projections and compare your actual position with your planned targets. This will help to inform decision making for your business and edge against unforeseen complications.
Secure financing from investors
Your business plan is a crucial part of a loan application and can be used to back it up when seeking investments from investors. Investors and lenders require this to help them decide whether or not to invest in your business.
Communicate your vision for the business
A business plan provides an organised and specified set of information which helps to articulate your vision and mode of operations to your employees, management, suppliers and even your customers.
What your business plan should have:
This is the first and most crucial part of your business plan. It summarises the key points showing the major highlights on one page. Anyone interested in your business would read this page to get a general overview before going into the details therefore, make it brief and interesting.
This section provides information on your business – mission and vision, products or services offered, target market, type of consumers and factors which set your business apart from others in the same industry.
This helps you understand your market well and how you can fit into it. It shows research on the industry you operate in and the type of consumers you want to target. Here, you are able to identify the SWOT of your business and build your strategies on it.
This shows information on how you run the day – to-day activities of your business and expectations required from fulfilling them. It is important that you are able to communicate these plan to your employees, management and investors.
A management structure is essential to show details on ownership of the business, the people involved and their various roles in the business.
Products and Services
In this section, you describe the products and services offered by your business, who you are offering them to (target market) and how it can meet their needs.
Marketing and Sales Plan
Here, you define your strategy to market products or services offered to your target market and how you intend to generate sales. You need to be able to set yourself apart from other businesses offering the same products or services.
This sections shows how much you expect your business to make over the years. It will serve as a motivation and drive you towards achieving your business goals.
Business Plan Templates
To develop your business plan, you can browse through the different resources and free templates available on the web to help and guide you. Here are three to get you started:
Remember, a goal is just a wish if you do not plan. Therefore, start developing your business plan because you surely have a better chance of success than those that skip the planning process.