While many business owners recognize that a small business plan is important, they often don’t realize just HOW important it is. While having a business plan cannot guarantee success, for some businesses it can make the difference between success and failure.
To make sure that you get the most out of your business plan, here is a list of ways to help you determine the real value of a comprehensive plan. If you are thinking about writing a small business plan, keep in mind that a condensed version of a solid plan is all that you’ll need! A solid business plan can help build the foundation for a successful future. (Click here to read Essential Elements of a Small Business Plan)
A Solid Business Plan
1) Shows how your business will make money. The bottom line of business is to make money. Business plans are designed to help express this purpose in financial and analytical ways, and to show prospective business partners and investors how their money will be spent and when to expect a return on their investment. If convincing investors is a necessary part of the success of your businesses, don’t skimp out on this essential element.
2) Determines your future financial plans. Well-written business plans can help forecast future financial needs. While nothing is certain, knowing at least where to take your business for it to be successful is a good start in the right direction.
3) Outlines spending. Resources, especially when economies are tight, may be few and far between.
Knowing how best to spend scarce resources is important for the longevity of any business. A small business plan can help to outline essential spending needs when money is tight.
4) Demonstrate how you will avoid pitfalls. Poor planning often causes the death of many great ideas. In order to ensure that your business ideas do not result in failure, a small business plan can help keep a business on target and ensure that you’re spending money efficiently to keep things moving. A small business plan can also help you delineate ideas and work through some of the potential pitfalls before you or others make big investments of time and money.
A small business plan is a must for startups
Most funding sources won’t even consider making an investment these days without one. The reasons are clear – businesses that take the time to build a solid small business plan are more apt to stay on target and spend wisely as the business grows. There is plenty of time later for fancy upgrades and improvements; when starting out, it is best to think small and grow large.
- Update the plan periodically. While a plan may be a necessary component of success for many businesses, don’t think of it as a one-time affair. Business plans should be re-addressed annually and updated based on new circumstances and fiscal realities. Using a small business plan as an organizational road map helps ensure long-term success and keep leaders focused on the mission, goals, and long-term growth of the business.
- Lay out the marketing plan. A comprehensive plan includes marketing projections. Research data can help leaders identify and focus on target markets and the best ways to reach them. Businesses should keep a keen eye on demographic changes and update their small business plans regularly to keep up with trends.
- Provide direction for business leaders. It can help channel resources in terms of both time and money. This focused direction helps ensure success by helping leaders capitalize on expenses to meet long-term goals.
- Lay the foundation for future business decisions. Don’t forget to consider a business plans as an indispensable business tool for future product and service plans. Business plans help leaders stay aligned on the best decisions for today, tomorrow and well into the future.
- Show your business is serious about success. Having a formal plan says a lot about how seriously a company takes its business. For investors, consumers, and potential business partners, this means that business leaders recognize the company’s potential for success and are serious about fostering an environment that will help it to grow. Consider these players when developing a small business plan for a complete and rounded business approach.
Whether your company sells products, services or both, the type of business products or services you provide will also determine how your plan is structured and how much content it should include. In general, a good business will not succeed or fail based on the information provided in a small business plan; however, a business plan can help you become successful through focused planning and forethought. Click here to view a free business plan sample and basic business plan layout.
For more information on our startup business plans, contact us today!