Is a Business Plan Necessary?
Whether you are a small business or a large corporation, a business plan is an invaluable part of planning. It influences the decisions made within your business, which can determine failure or success. A formal business plan defines your business. It details your objectives and how they are to be achieved. It is a concise way to review the past and plot future performance and goals of your company.
As a startup company, it defines your business. It outlines in specific and clear details every aspect of your business. A business plan is essential to obtaining financing for your company whether it is for starting a business, obtaining additional financing, or applying for a grant. External funding requires an up to date business plan that includes both an Income Statement with the Profit and Loss statement.
If you are looking to purchase a business, a business plan evaluates the future success of the business. Writing a formal business plan, you are evaluating the businessâ€™ past and projecting future success of the business. It shows the lender your capacity to repay.
A business plan is part of a process. Itâ€™s about your company and the desired results. It defines goals and objectives, outlining the actions necessary to obtain them. Review your business plan regularly to determine results, follow up and new planning. New services, products or future expansion of your business are evaluated, and details who, what, when, where, and how you expect to achieve them.
There are several software programs, which can help write a formal business plan or there are companies who will do the work for you. Preferably, you can write it yourself. Writing your own business plan takes research and time.
SCORE, Counselors to Americaâ€™s Small Businesses has many how-to and business tools online at Score. They offer free online mentoring services and templates for business plans; The Small Business Association at Sba has a wealth of information on writing your business plan. There is an online interactive Business Planner at Canada Business which is a question and answer format.
Your business plan needs to be simple, realistic, and complete or it will be difficult to implement. It should be easy to understand and act on. Objectives should be concrete and measurable with specific actions and dates. Sales goals, budgets, milestones, start and completion dates, who is going to do what, and expected costs of each. Your business plan also needs to include exit strategies. Exit strategies detail backup plans in the event goals and objectives are not obtainable as planned.
Writing a business plan is about committing to future action. The time spent researching and writing a plan for your company will lead your business in the direction you want it to go.