A business plan is the most important and often overlooked part of running or starting a business, expanding an existing business, or obtaining financing for a business. If a plan is developed effectively, the success rate for the purpose of the plan increases exponentially, whether it is to start, expand or run a business and / or obtain financing for the business.
A well-developed business plan leaves less room for mistakes and failures. Although you cannot predict everything that happens in the future of a company, a good Business Plan helps you avoid certain pitfalls, overcome obstacles, and anticipate and create business opportunities. When you run into roadblocks and problems, having a Plan in place, built into the business, provides you with a system and mechanism to effectively address challenges, often turning these challenges into manageable situations or even future opportunities.
Let’s start with the fundamental questions: Why have a Business Plan? What can a plan do for my business?
First, a business plan helps you run a business and is the roadmap to business success. This is the main reason for a Plan, and the plan should initially be written from this point of view. However, there are many other beneficial reasons for developing and implementing a plan. A Business Plan forces the different departments of your company to work together to implement a synergistic Strategic Plan. A well-developed plan helps your sales team close more deals and provides them with effective tools to use in the field with their clients. A plan helps your clients understand the direction your business is taking, encouraging them to become “partners” in the success of your business. Your plan can help you build relationships with the necessary vendors, helping them more effectively understand how to help your business grow. A plan can also effectively help you get the funding you need to start or grow your business.
Uses of the business plan
There are different formats and purposes of business plans for various circumstances and situations. It is recommended to first develop a comprehensive plan to effectively and successfully execute your business, venture or projects. Once the Comprehensive Plan is completed, you can take certain parts of the Plan to form other Business Plans for various purposes and situations, such as a Financing Business Plan for a Bank or a Venture Capital Firm. A good Business Plan Workbook will take you step by step in developing a Comprehensive Plan, which you can “adjust” for various purposes and uses beyond the effective management of your business.
Internal uses of a business plan
1) Identify the strengths and weaknesses of a business operation and potentially problem areas.
2) The improvement of the company’s performance results from the development and implementation of strategies that, simultaneously, are based on the strengths of a company and correct its weaknesses.
3) Effectively communicate to management and employees clear expectations of a company’s performance and priorities to ensure coordinated execution of the company’s strategic plan.
4) A Comprehensive and Effective Plan coordinates and ensures coherence between the various divisions and departments of the Company to achieve the successful operation of the various units of the Company.
5) A plan provides a mechanism to measure the performance of a company and an individual. Set a clear standard for determining whether actual performance is good, bad, or neutral.
6) A Plan establishes a system for making key decisions in the Management process of a Company. As new developments, opportunities and difficulties arise, the Business Plan provides a solid framework for evaluating the impact of developments and opportunities on the operations and performance of the Company as a whole and on its individual departments and units.
7) The process of developing a Plan will educate and motivate the employees of a Company. Management, executives and key people learn more about the operation of a company and the direct relationship of their areas of responsibility with the achievement of the objectives of the company. This is achieved by analyzing variables such as past performance or the impact of trends and developments, while developing Action Plans for the future success of the Company. The process solidifies the commitment and motivation of its people to achieve the Company’s Strategic Plan.
External uses of a business plan
1) A Plan may update and educate external parties (ie investors, shareholders, suppliers, customers, regulators, legislators, etc.) regarding the structure, organization, objectives, goals and performance of your Company.
2) A Plan can secure financing and investment to finance your Company.
3) A well-executed Plan can get ahead of your competition, making entry barriers clear.
4) Solidify relationships with your customers by making them true partners in your company’s product and service offerings, in innovation, research and development, and most importantly, in your growth.
5) A plan provides your suppliers with important information about your business so they can help you manage costs and promote growth. A slight change in the offer or the terms of a supplier can have a dramatic effect on the profitability of your company.
6) A plan is a sales tool that helps your sales team promote understanding across your customer base of the direction, competitiveness, and uniqueness of your company. An integrated business plan enables your sales and marketing team to open up new markets and opportunities and close more deals.
7) The Plan demonstrates to third parties the fundamental responsibility, beliefs and integrity of your Company.
