A business plan is more than a document; it is a foundation of any business that is successful. Whether you are a startup launching a new business or managing a current business, a business plan is a roadmap for your vision, strategy, and operations. A business plan helps entrepreneurs refine ideas, identify and attract investors, and maintain focus in a rapidly evolving environment.
A business plan essentially specifies the purpose of a business and how it plans to operate. A business plan usually includes an executive summary, business overview, market analysis, organizational structure, product and/or service information, marketing and sales plan, and projections. Each of these sections describes how a business will run, grow, and generate revenue.
The first and foremost benefit is strategic clarity for the entrepreneur. Once they have written down their goals and how they plan to get there, the entrepreneur is more able to make strategic decisions, around how and/or where to allocate resources, identifying challenges before they arise, and make sure everyone involved (employees, investors, etc.) is on the same page.
Whether you are a new startup or small business, having a solid business plan is very important in order to obtain funding. To the investors or lenders, they need some assurance that the business has a clear path to profitability. A well drafted business plan reflects credibility, thoughtfulness, knowledge of the market, and understanding, and increases the chances of obtaining financial support.
Just as important to know when writing a business plan is that it is not set in stone – it can adapt! By revising or re-creating the business plan as your company emerges in the marketplace or as market conditions change, your business plan and the development of it can have re-newed energy, a chance to identify what is important, and not be lost in a shuffle of many unimportant pieces of paper. Regularly reviewing a traction or performance of a business can keep you competitive, determine if your model is still current, and allow a company to tweak their strategy along the way.
In conclusion, a business plan is an important tool for anyone who is serious about starting or growing a business. It forces some structure around ideas, mitigates risks, and serves as an outline for success. At a bare minimum, if you are starting a business or growing one, put together a thoughtful all-encompassing business plan. It is the best investment you will make in the company.
