You cannot expect to have a successful endeavour without planning. You can hope, yes, but the chances of success are greatly diminished without a plan in place. Business planning is considered to be one of the most important aspects of getting into business. It is, after all, the first step that the entrepreneur would take. All aspects of the planning will then be put down on paper, and this is where the Business Plan is allowed to take centre stage.
Sadly, even established businesses and large companies sometimes go straight towards making important business decisions without a formal plan in place. Sometimes it works out, most times it doesn’t. Most agree, however, that having a business plan is very important, especially if you want to achieve your goals within a set time frame and a fixed budget.
What do you need a business plan for, exactly?
A business plan is often prepared for one purpose: to obtain funding, either from potential creditors or from potential investors. Banks and lending institutions will give priority to applicants that present a business plan for a bank loan. Writing business plans for investors is also a given, since investors looking to put their money somewhere profitable will find it hard to part with any sum if they are not given a picture of what to expect in the future..
However, that is not all it is used for. There are more reasons for a business plan.
Even companies that have been in operation for a long time will benefit from having a business plan. Businesses will naturally want to expand and grow and, in order to do that, they have to come up with ideas on what strategies and programs to implement. Will they have to introduce new product lines, or will they think about tapping a new market? Putting these down on a business plan will give the management a clearer direction and a clearer path on how to get where they want to be in the future.
A business plan is also a very useful tool for management, giving them guidelines and charting specific courses of action in order for them to manage the business resources and operations more efficiently and effectively. Decision-making processes will be easier if there is a well thought out business plan they can refer to from time to time.
Monitoring the progress of the business will also be facilitated by a business plan. Management may evaluate their performance, as well as that of the other members of the organisation, by periodically checking if everything is going according to the plan. In the event that deviations are found, they can make adjustments accordingly.
Smart businessmen will always have an exit strategy in place when they start a business, and this will also be indicated in the business plan. It will allow the company to focus on activities and decisions that would support a strategic exit for the enterprise.
So, can you do without a business plan?
Whether you are just starting a business, or you already have an existing business but you want to expand or take it to a different direction, you need to have a business plan. You need to have one, whether it is a restaurant business plan or a business plan for a coffee shop. Even if it is not to secure funding for your business, it will serve as a roadmap and timetable for where you want your business to go to, how to go about it,and how long it will take for it to happen.