(ThyBlackMan.com) Many people who are about to start a business have a mistaken idea about business plans. They think that they are simply a tool for raising money. Therefore, many prospective business owners really do not give nearly as much thought or time to this important document as they should, especially if all of the funding is coming from friends and family members. The business plan is, in reality, an important tool for helping to understand how your business is put together. This can even be used to help monitor progress, hold yourself (and others in the business) accountable, and to better control your company’s fate. It can even be a great sales and recruiting tool for key employees and future investors.
Forces You to Review Everything at Once
When writing a business plan, this happens to force you to review a number of factors all at once. This includes your value proposition, financial plan, marketing assumptions, staffing, and operations plan. It should also force you to ask questions in light of all these issues. A great example might be how you forecast future sales growth. Ask yourself if this aligns properly against your staffing plan.
A properly written and developed business plan will have you thinking about whether or not everything is congruent and fits together. It can be thought of as a puzzle, where everything really needs to fit together in order to form a cohesive unit.
Holds Everyone Accountable
In the beginning, and possibly well into the future, you are the major driving force in the success of your business. Having a business plan involves laying out major marketing and operational milestones. Read the
5 reasons you need to write a business plan here to get a better idea as to how to go about it and why you need to use this plan to hold yourself accountable for and to these results.This means that it can also be used to ask yourself why (or why not) something happened. If your product was not developed on time, what happened? Once you have an answer, you can use your business plan to adjust and maybe re-formulate your ideas. The things you learn as going through these processes and steps will help to make you better next time.
Helps Drive the Future
Your business plan is not simply a reactionary device and learning document; although it is indeed this, the business plan is actually so much more. Whatever is written down should not be seen as a passive type of goal or merely a prediction. Rather, this needs to be your driving force. If the business plan says that you will get 500 customers by the end of your second year, then this should be the main focus of the sales department. This can also drive your hiring and staffing decisions, especially in key areas. The plan lays out targets in virtually every key area like sales, hiring, financing, and expense items.
The business plan should outline key strategies and even tactics. Although there should also be enough room for flexibility, you do want to mention the main methods that will be used to achieve these targets. This could mean in-person sales calls and even using telemarketing. However you choose to do it, lay it all out in the business plan. You can always add additional methods that seem to be appropriate in the future.
Helps Attract Talent
If you are going to be pursuing quality talent and employees, many times they will ask questions about the business. Handing them a business plan can be incredibly helpful in having them understand exactly what it is that you do and how you intend to do it. This can also help them to see and understand their possible future role in the company and maybe even given them additional ideas about how they can help contribute to its success.
You can also use this as an evaluation tool. The reactions that a potential employee or even investor has can give you a lot of insight. You can learn how quickly they are able to think through some of your key issues. It can also be helpful in determining how thorough they might be in analyzing potential issues and problems. It also sends them a very strong message: that you really understand your business, are committed to achieving your goals, and are thoroughly capable of doing so.
Avoid Making Big Mistakes
People who just jump right in to a business and start without taking the time to research and develop a business plan can often be doomed before they start. Writing a business plan literally forces you to think through your idea in a more considered manner than just jumping head first into the thick of things. Many owners could have avoided mistakes like taking on partners who did not bring the proper skill sets, or not setting aside enough capital to make it through the rough spots during the first year or two, or even realizing that their idea was simply not a viable way of actually making money. Your business plan helps to avoid running in the wrong direction.
Counterbalances Emotions
Starting a business is an exciting time and process. There will be times during the start-up phase when you might possibly become so passionate about the idea itself that you end up losing sight of reality. Or, possibly there will be times when you are gripped so tightly by fear, doubt, and many other emotions that you do not know what to do. With a business plan, you can always take a step back and look at where things are and have a good idea about what to do next.
Bottom Line
You need a business plan because it is quite simply the best type of guide possible for your business. This will help you get started, keep you on track, and can even get you going again during times of stagnation. A business plan is really so much more than a way to simply raise money. It is your plan for attacking the business and ensuring that you are following a proven method to success.
Staff Writer; Shawna Adams