Is a Business Plan Right for Me?
What’s a business plan?
In today’s technological landscape, with start-ups launching every minute and venture capital seemingly being pumped into any and every idea, the importance of a business plan has become somewhat disrespected. Yes, the main purpose for creating a business plan is to secure funding – but that is not its only purpose.
In fact, business plans aren’t solely created for new businesses. Existing businesses develop business plans to define their target audience, dissect the current landscape of the industry and competitors, and develop financing options for future growth, such as entering a different market or extending a product line. A business plan does not only serve to entice investors but to develop a roadmap based on the current vision of the organization and assign deadlines and accountability to help lead your organization down its determined path of success.
Ultimately, there is no one purpose for a business plan. Ignoring the hope for funding and regardless of how old the company is, the following are reasons why your organization would get value out of writing a business plan.
A business plan helps you map out your future, rather than your month
Even if your organization chose to forego a business plan, your business likely still has an outline of goals, objectives, and strategies to drive the organization. The mistake you make by not having an overall business plan is that your goals and objectives are focused on the month or year ahead, rather than where your company could be in five to 10 years. By failing to plan far enough out, your vision for the organization can only extend so far.
Of course, there are unforeseeable emerging trends and technologies that a business plan can’t predict. This is why the business plan serves as a living document that is routinely reviewed, updated, and optimized to continue to reflect today’s vision for the company. When reviewing the business plan, always keep the end goal in focus – the why that started the company to begin with. Your business plan serves as your daily reminder of that big “what if everything went right” goal you set at its inception that can continue to drive each day, month, and year.
A business plan increases communication and transparency within your organization
As mentioned, your business plan isn’t created solely for investors to read. In fact, the entire company should read your business plan. Every department and level of your organization should have a copy to keep the company organized and working toward the same common goal. Sharing your business plan will your employees will help them understand their role in the organization’s vision, even if and when the vision changes.
Sharing your plan with your employees creates transparency and helps develop trust throughout the organization while giving everyone a better understanding of their purpose within the greater plan. It’s important to note that after you share the plan with your employees, you should encourage feedback to keep the lines of communication open.
Your business plan will help you manage cash flow
Many businesses fail not because they were unprofitable, but because they were unable to sustain enough cash flow to pay their debts as needed. If for nothing else, a business plan forces an organization to map out their checks and balances one to three years out. This will help the orginization to get a bird’s eye view of how much cash they need on hand to launch the business and how much cash they need to continue to have on hand to sustain it. A well-developed financial plan will help you manage funding requirements ahead of time to protect the business from its worst-case scenario before they fall behind.
Your business plan connects all the pieces
Crafting a business plan forces the leaders of your organization to learn and understand the industry, the current state of the market, and the landscape of the competition. It encourages you to identify challenges and develop strategies to combat those obstacles ahead of time and set timeframes for your achieving measurable, tiny goals that will eventually lead to the grand vision.
Having all the projections and data at your fingertips allows your organization to connect planning, strategy, performance, and accountability into one document. This helps you make informed business decisions that have the end-goal for the business in mind and ultimately drives your competitive advantage. No other document exists to connect all the moving parts of your business into one game plan.
Sometimes your business plan can be successful with one page
Of course, your business plan is going to take time and energy – but that doesn’t mean it needs to be 50 pages worth. At AHA! Business Consulting, we’ve developed the One Page Planning and Performance System™ that can help you develop your plan and position your company for success. We find this condensed business plan process to be the best tool to accelerate growth and focus people and resources on achieving company goals.
Learn more about how our One Page Business Plan can connect all the tools needed to set your company for success in a simple and easy way.