Traditionally, writing a business plan isn’t so cool. You’ll often hear people saying that it is useless and a waste of your time. You may even hear things along the lines of ‘simply get it out in the market’, ‘trying is the only way to find out if it’s worth’, ‘just go ahead and do it’ and so on. But as you would agree, some form of planning is always required for success.
Here are five good reasons why and how a business plan can help your business:
See the bigger picture
The process of preparing a business plan helps you dig deeper into your plans. It’s like a scenario rehearsal that helps you evaluating your core strategies before you put them in action. You’ll double check your luggage before leaving for a holiday. Will you start a business without double checking your strategy?
Business plan lets you see the bigger picture and help you validate your ideas. Most importantly, this exercise will allow you to fix holes in your plans early on.
Know and work on your strengths
Without a business plan, your strategy is only based on the mission you began with. In other words, it’s based on your offerings but does not take into consideration the external factors. Factors in your industry that you cannot control are called external factors. So it could be industry trend, moves of your competitors and even market sentiment. So without a detailed consideration of these external factors, your strategy is only half complete. For example, without a competitive research, you’ll not be able to learn your competitors’ biggest strengths and weaknesses.
A competitive research in your business plan can help you see where you stand against your competition. It will not only help you know your competition better but also help you understand your own strengths better. You’ll be able to identify industry heavyweights and get an idea on their market strategy. Overall, you’ll gain a better insight into your industry and business.
In turn, you can make informed strategic decisions to outperform your competition.
Know your customers
A business plan is a 360 degree evaluation of your industry and business. With a detailed market research, you’ll be able to find out:
- Your customers’ age group
- Prominent gender
- Industry trend
- Geographical presence of your customers
- Where they come from
- Their social and economic status
In other words, you’ll know your customers better.
Why your business was born? What is the reason for its very existence?
Yes, we know it’s your baby and you know all about it. It’s like your own backyard, we get it. However, do your employees understand your vision? If your employees cannot understand your business and its vision, they will not be able to convey your message to your customers.
Prepare a business plan with your vision and mission statements. A very simple business plan can bring everyone on your team together to create a unified vision.
Validate your idea
As you already know, business plan is almost always a prerequisite if you are applying for a funding. Is it just a formality that exist in the banking sector? Not really.
For starters, it helps your lenders understand that you understand your business. It also helps them understand that you are serious about your idea. Most importantly, a business plan helps you put forward a logical explanation as to why your idea will work. Having it in place may initially seem like a waste of time, however, it is likely to be worth a lot more than the time you invest.
I hope you’ll find this article helpful. Our next article on this topic is going to be even more interesting with details on what to include in your business plan. Please subscribe on our social media platforms for regular updates on our new blog posts.