We all dread the process of developing a business plan because honestly, it can be a taxing process. But guess what? Without a business plan, it’s safe to say you have no business. And we all know failing to plan is planning to fail. A business plan is not only one of your most important assets it also has numerous advantages for the growth of your business.
#1: Is your idea viable?
A business plan helps determine the viability of your business idea. Developing a business plan allows you to assess beforehand how viable your idea is. Besides the business plan, the only other way to determine whether your business idea is feasible is by going out and doing it. Having a business plan will save you time and money when it comes to testing the feasibility of the business idea.
As you develop your business plan, you get to learn more about your industry, potential customers, and competitors. This enables you to make the necessary adjustments to ensure your product or service meets the needs of your potential customers.
#2: Hiring Personnel
Another major advantage of a business plan is that it helps to map out the people and skills that you will need to execute your business idea. Your business plan becomes a guideline on the people who are a best fit for your business, when you need them and the level of skill that they need to have. As the team grows, your business plan becomes your point of reference. A team that is diverse, skilled and aligned to the business’s vision and goal(s) will help you get closer to your business goals, and sometimes even faster.
#3: Setting Goals
We all know how vital goals are for any business. This brings about another advantage of a business plan as it helps in setting your big ambitious goals and objectives.
Once you are clear on the vision of your business, it makes it so much easier to set goals and create an action plan that you can review on a quarterly basis. You can use these goals to assign different areas of work to your team members. You can also use these goals to create your own KPIs and get an accountability partner to hold you accountable. And determine whether the milestones and targets you have set in your action plans are being met or not.
Over and above business goals and objectives, a business plan prompts you into analyzing all aspects of the business from the major ones to the nitty gritty. It captures the objectives and plans for each team in your business (whether you have actual team members or not) i.e. finance, marketing, operation, human resources, etc.
#4: Seeking Investment
When seeking investment for your business you need to sell yourself in the best way possible. A well-done CV gives any candidate a competitive edge. A business plan is perceived as the curriculum vitae for your business, if it is well done it gives you a competitive edge. It’s undeniable how important a great business plan is for your business.
#5: Scenario building
Another advantage of a business plan is it provides an avenue for building scenarios. This is important as it ensures that you understand the risks, uncertainties or any constraints that your business may run into. This is quite beneficial in helping with planning ahead for your business, and ensuring that you have a plan in case you run into any of these risks along the road.
From the above pointers, it is evident that the importance of a business plan cannot be underestimated. Running your business without a business plan is a form of self-sabotage. Now would be a good time to get working on your business plan. P.S Don’t rush it – take your time and come up with a ‘bullet-proof’ plan. If you already have a business plan remember to keep revising it and adjusting things depending on how your business vision evolves.