If you are a would-be business owner who is researching business plans, you may have gotten the impression that they are no longer necessary. But while this may have caused you to feel a great deal of relief, the truth is that the business plan is far from dead, and far from unnecessary.
The bottom line is that for a business to be successful, it needs to have some sort of compass, and that’s exactly what a business plan is. If you still need convincing, read on for several reasons why business plans are still relevant.
Business Plans Are Important for every Venture
One popular myth is that business plans are only required for those who are looking for funding. Another popular myth is that if you already have investors, you don’t need a business plan. Both of these are completely false.
A business plan is meant to be a collection of the tactics and strategies that you’ll be using on a consistent basis to build your business; it is not just a tool to get funding when you need it. An unrealistic plan or no plan whatsoever can, more often than not lead to business failure.
Yes, People Do Read Them and Will Request Them
The majority of entrepreneurs who are looking for funding will turn to a bank, angel investor, or to their friends or family, and not necessarily to a venture capitalist when they need money. Even so, a business plan is still a vital document to have. Regardless of the source you are targeting for funds, it is still an investment and should be treated as such.
Your investors will want to know the answers to their questions about your business. They’ll want to know how you plan to make money, what makes your business special, and who will buy what you’re selling, to name just a very few considerations. Your business plan will contain the answers to these questions.
No, A Business Plan Isn’t About Predicting the Future
Many think that to develop a business plan, they must try and predict what will happen to their business over the next few years. It’s no wonder that so many of us cringe at the thought of writing a plan!
But writing a business plan isn’t necessarily about predicting the future; it’s about the people, money and other vital items you will be putting in place to make your business successful. For example, by finding the right supplier, your products can be created with high quality in a timely manner, making you more able to provide your customers consistently with what they want.
So instead of thinking of a business plan as a big crystal ball, think of it as a collection of the things you plan to do and the relationships you plan to make to reach your ultimate goal of a successful venture.
It’s Not Written in Stone
Many entrepreneurs feel as though writing a business plan is a waste of time because things can change too quickly. But as the subheading states, a business plan isn’t written in stone.
Rather, it is an ever-changing document that will transform as changes in the market occur. It is a map of your business. And just like any other map, it cannot tell you when you’ll need to take a different route to get to where you’re going; you may have to alter your plans to reach your goal. The key to a successful business plan is in being willing to adjust certain aspects when new information is received.
Writing a business plan can be a time-consuming endeavour. However, it is an absolutely crucial part of your business, whether you are just in the planning stages or have been trading for a few years and need to plan for the future.