Do I need a business plan?
You will learn
- What a business plan is
- The benefits of a business plan
- Who can help you write your plan
Question: do I need a business plan? Answer: yes.
Researching your idea thoroughly, preparing a business plan and a cash-flow forecast are all vital components of a successful business. Even if you don't need to apply for funding, it is still important to write up a business plan.
What is a business plan
A business plan is a working document for yourself that reflects your business idea and the elements that will make it work. You typically will refer to it periodically to establish that the business is 'on-track' and identify if changes are necessary or desirable. If you intend to apply for funding, raise money through a bank or lease premises, you will be asked to provide one. This is the roadmap for your business that saves you time and money in the long run. You can find out more about writing a business plan to get a loan from the Start-Up Loan Company here.
Research has proved those with a business plan, who follow it and revise it, are more likely to be successful and generate higher average profits. By creating a business plan you put in place strategies and procedures to drive the business (and yourself) forward, you set targets that become key performance indicators so you can react quickly if things are not going according to plan. You will be able to prioritise work to be undertaken and identify what additional resources may be required and when. Crucially, you will understand the finances of the business which will enable you to apply for funding if necessary, especially at the outset or when you wish to develop the business.
A solid business plan helps you communicate the vision and values of your business to all parties from banks and funding bodies, to clients, suppliers and staff. All these people are stakeholders in your business and working as a team is a recipe for success.
Writing a business plan
A solid business plan showing market research, marketing strategies, sales forecast and cash flow along with the people involved is vital if you are going to apply for funding. Investors need to be confident that you have taken everything into consideration and this confidence will come from the evidence you put into the plan.
There is a section of a business plan called the Executive Summary and this is probably the most important page in the whole plan, especially if you are seeking finance. So, do ask for help if you're struggling because it's important to get this right. The Executive Summary is often the first thing that is read, so it needs to make the reader want to go further. Whilst often the first thing to be read, it is usually the last thing to be written on the business plan as it will change as you work through the plan.
If you're struggling to get started with your plan, take a look at these helpful templates from The Prince's Trust.
Writing a business plan
Remember, the most important reason to write the plan is it will ensure you have considered all aspects involved in running your own business. There will be elements that you may not have considered such as insurances, data protection, regulations and compliance, health & safety, all things which if done wrong can put your business at risk.
It can be daunting to write a business plan, but it is a working document that will keep you on the right track and keep the focus of your business and personal objectives in sight. By committing your ideas to paper, it helps you understand your business better and the actions needed for the business to develop. You will understand not only your business but the market as a whole, which gives you a better chance of long term success.
Review it, at least annually but we would suggest every six months. If in doubt do not go it alone when there is so much support available. It really can make the difference between success and failure and it will pay dividends in the long run.