You have the idea, the energy, and maybe even your first customers. So why slow down to write a business plan? It can seem like something banks ask for, but not something that really helps you run your business. However, for small and growing businesses, a well-crafted plan is not red tape. It is one of the most practical tools you can have to grow your business.
Day-to-day, running a business makes for a busy work life, and this can stop you from properly considering some vital questions. For instance, where exactly is your revenue coming from in 12 months? What happens if your biggest customer leaves? How much working capital do you need? Writing a business plan forces you to answer these questions. The process of articulating your market, your competitors, your pricing and your costs often reveals assumptions you had not realised you were making. That clarity is very valuable and can make a significant difference to your day-to-day decision-making.
As businesses grow, it becomes more difficult for everyone in the business to work towards the same goals. A business plan gives everyone a shared reference point: the direction the business is going, what the goals are and the reasoning on key decisions. A concise, well-structured plan covering your value proposition, target market, financial projections and key milestones can help your team to keep working towards common goals as the business expands.
Whether you’re approaching a bank for a business loan, pitching to investors, or applying for a grant, a business plan is almost always required. A strong plan lets lenders and investors know that you understand your business deeply. It allows you to show not just the opportunity, but also how you will manage the risks. A clear, realistic, well-evidenced plan helps you to stand out. It also protects you. The discipline of putting forecasts and projections together often reveals whether funding is the right choice for your business.
When urgent tasks demand your attention each day, taking time to write a business plan may seem too much. However, for businesses that are serious about growing, the thinking needed to put together a business plan is never wasted. Start with a single page covering your business model, your target customers, your competitive advantage and your key financial assumptions, and build from there.
If you would like help to craft a business plan to enable your business to grow, why not ask us about our business advice service?
