Get Serious About Business Planning
It is amazing that in today’s business world many business owners don’t have a business plan. How can they hope to succeed without one? A business plan is a crucial element to your business and will add value in so many ways.
Essentially there are five elements to a business plan:
- The Marketing Plan
- The Human Resources
- The Operational Plan
- The Financial Plan
- The Exit Plan
If undertaken correctly your business plan should:
- focus your business to achieve desired goals
- reduce expenses
- increase revenue or sales
- increase your number of customers
- improve your service or products
- increase your profit
- increase your sales price when you are ready to sell
WHY ARE BUSINESS PLANS IMPORTANT?
A business plan accurately characterises your business as it describes your goals and objectives which guide your business towards achieving its targets. It serves to inform your personnel and shareholders about your strategies and how you plan to achieve them.
Because it provides specific and organized information about your business you can also use this document to explain to financial institutions as to how you will repay borrowed money, a good business plan is a crucial part of any loan application.
The importance of a comprehensive, thoughtful business plan cannot be over emphasised!
Much hinges on this document, your eventual exit plan, outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.
The business plan is a necessity.
But, despite the critical importance of a business plan, many business owners drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don’t have enough time.
However, just as a builder won’t begin construction without a blueprint, eager business owners shouldn’t rush into new ventures without a business plan.
Another common objection is how much is this going to cost. Of course there is going to be a cost involved. Ask instead how much more money can you make by having a plan that is going to focus on the critical elements of your business.
A business plan is a tool with three basic purposes:
it is used to communicate, manage, and plan
As a communication tool, it is used to attract investment capital, secure loans, educate and guide employees, and assist in attracting strategic business partners.
The development of a comprehensive business plan shows whether or not a business has the potential to make a profit. It requires a realistic look at almost every phase of business and allows you to show that you have worked out all the problems and decided on potential alternatives before events actually occur.
As a management tool, the business plan helps you track, monitor and evaluate your progress. The business plan is a living document that you will modify as you gain knowledge and experience.
By using your business plan to establish timelines and milestones, you can gauge your progress and compare your projections to actual accomplishments.
As a planning tool, the business plan guides you through the various phases of your business. A thoughtful plan will help identify roadblocks and obstacles so that you can avoid them and establish alternatives.
Many business owners share their business plans with their employees to foster a broader understanding of where the business is going.
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NEED MORE INFORMATION ABOUT BUSINESS PLANNING?
Baron Consultancy has been business consulting to small and medium size business owners and helping them achieve various key objectives since 1994. They can provide advice on such key issues as business plans, business budgets, business marketing plans, exit plans, personnel recruitment, asset management, sales and marketing and operational analysis.