Do I Need A Business Plan?
At some point in life, sooner or later we hear the saying, “If you fail to plan, you’re planning to fail!” This popular saying attributed to Benjamin Franklin is one that has been proven to be true over and over again, and never more so than in the business arena. Whether you are already in business, exploring the possibilities to be or not to be in business, or about to begin your new venture, it is both necessary and important to decide if you should create a business plan.
Let’s be real, a business plan takes time, thought, and talent to develop. Whether one possesses the necessary skills and experience to do a professional job or must rely on industry experts to create a quality product and understand the uses of a business plan is a significant first step. Below are the top 3 very solid uses of a business plan:
Blueprint of the Business: The plan will outline how the business will be organized, the type of entity, day to day operations, who will be needed to do what, all the resources required, what may be expected, how to meet challenges, steps to market and sell products/services, clients/buyer persona/target market, financial projections including estimated income, expenses, profit and loss (P&L), return on investment (ROI), etc.
Passport to Funding: Whether seeking to persuade investors or secure a loan at any stage of business development, a well thought out, succinct business plan will provide the information in which the decision to give you the money you need will be based. Investors and lenders alike will expect the plan to cover all the main points, showing evidence of the company’s ability to generate sufficient cash flows to meet debt obligations in the future, while enabling the business to continue to operate effectively.
GPS for the Future: A business plan helps a company assess future opportunities, make definite decisions about the trajectory that will be followed to achieve outcomes, and realize growth and profits. There are always choices to be made when establishing strategy and allocating resources to guide the growth of a business. A pre-determined plan forces the company to consider and commit to key activities prioritized for maximum benefit over a set period. Milestones can be established providing a measurement by which progress can be assessed. Planning for longevity and sustaining profitability are elements of a business plan that will inspire confidence, collaboration, and commitment from everyone connected to the vision of the venture.
Finally, I would suggest that the answer to the question in the title of this blog be a resounding, “Yes.” You may choose to create a lean and brief, but precise first year business plan, or a comprehensive, customized, detailed document with relevant statistics; 3-5 year projections; strategies for every aspect of your business operation; and future development. Your decision should be guided by the use you intend for your business plan. If your audience includes potential partners, such as investors or lenders, then the more comprehensive and professional your plan, the more likely it will be to reassure them that your business is worth backing. It is not an exaggeration to say that your business plan can make or break your chances for success. So, plan for success!