Why Every Business Should Have A Plan
If you don’t know where you are heading, firstly, how will you get there and secondly, how will you know when you’ve arrived? This applies to any business, whether a ‘one man band’ or a much larger organisation. Most businesses start of with a vision in mind and have an associated plan of how to achieve this vision – whilst it may not be written down, it probably exists in the mind of the business owner and is typically where it stays. This doesn’t help if you are looking to disseminate this plan to staff and have them work in line with what the company aspires to – mind reading is unlikely to be on the CV of your employees!
Business plan basics.
There are many important steps to consider when developing a business plan for your company, but the first step is to fully understand the main uses of a business plan. The four main uses of a business plan are as follows:
a written document that you can use in your search for financing.
a tactical planning and management tool for your business.
a document showing the capacity of your team to control and manage all the aspects of the company.
brings you new ideas to refine your project by checking and estimating the induced hypothesis.
The necessity of business plans.
The drafting or update of your business plan is essential to the good management of your company. It can be used when searching for a business partner, for obtaining external financing, and for defining some stages of the development of your company, such as:
the creation of your company.
the launching of a new product.
the establishment in a new market.
the transfer, buy-out, or the structural development of your company.
Tips for developing a quality business plan.
1. To be credible, a business plan must be coherent and each parameter in the business plan must be based on facts.
2. There are many methods to build business plans, but very few can help you correctly carry out reliable financial projections based on a preliminary commercial engineering and market study. One frequent mistake when building business plans is to first define the target in terms of market share, and then try to “find” the number of customers necessary to fill these objectives! This process should be reversed
3. In addition, one essential point in a business plan is to define concrete policies and measures. This definition aims to gain a reasonable number of customers, based on a sufficient knowledge of the market. The calculation of the costs of the planned actions in your business plan are essential and make overall financial projections possible. In short, financial forecasts – including those related to the financing of the project – must be elaborated from the basic elements of the project.
4. In a business plan, the marketing plans as well as the financial forecasts require a basic understanding of how these important elements are calculated.
5. The last point and certainly not the least significant: A business plan is never ended “once and for all”. A regular follow-up and comparison between the theoretical business plan and the reality of its execution are essential. You can then modify your business plan and adapt it to improve performance and achieve your goals.
Planning for success.
Once your business plan is documented, publish it and communicate it with all the stakeholders and employees in the business. Have the measures and targets visible across the business within the relevant departments so the progress can be easily seen. Using the plan as a working and dynamic document and adapting it as the business develops is essential to future success of your business. Get your business plan out of your head, on to paper and in to action!