Why a Business Plan?
Business planning is a crucial part of a successful business. Business plans are dynamic instruments used on a regular basis to help owners and executives to plan for future growth and assess past performances. Included in a business plan are financials, competitive landscape, marketing, and sales to name a few. Without a business plan, how do you know where you are going, how you are going to get there, how you are going to know where you’ve been, and how are you going to course correct?
A business plan:
- Organizes your thoughts to better run your business
- Roadmap/blueprint – must revisit often; at least once/quarter
- Defines your business vision, objectives and goals
- Determines financial requirements
- Keeps you on track to achieve your goals
- Helps you to be more focused
- Forces you to be more objective
- Determines feasibility
- Serves as management tool
- Assists you in raising capital
I’m Not Seeking a Bank Loan So Why Do I Need a Business Plan?
A business plan is yours. Bankers, financial institutions, and investors hardly look at business plans. It’s a valuable document for you. By creating a plan you are forced to think about your business and how it is structured, the objectives and other critical matters. The plan helps an owner realize how interrelated all aspects of the business is. In addition, it helps you focus your ideas and determine how to best manage your available resources including capital, cash and people.
After completing your plan, you should be able to answer questions:
- Is there really an opportunity here?
- Can we pull it off?
- Can we make money/Is there potential for profits?
- Where are we?
- How did we get here?
- Where are we going and how will we get there?
Forecasting your finances as part of the plan will help you understand if, and how, you can improve revenue. It’s hard to make changes if you don’t know where you are and where you’ve been.
It helps other answer the following question:
- Will they have a chance to succeed?
- Can they pull it off?
- Will the cash flow?
- Did they make any head way?
- What have they done so far?
- Will they be able to execute and reach their objectives?
As your business grows, a business plan serves as a guide to help you track, monitor and evaluate your progress. Having your short-term and long-term goals written down and in front of you can help keep you on track to reach them. Business plans provide you with the ability to identify risks to your business and what alternatives exist to minimize them. By analyzing your business objectively in the plan, you can address problems before they escalate. Studies found that people who write plans are more likely to put their goals in action and increases your likelihood of success.
Business Plans are Not Static
As your business changes, your original plan may no longer be as relevant. Review your plan periodically – as often as once per quarter – and make updates as needed.
So How Do I Get a Business Plan Written?
A business plan can be as formal or informal as you need – the key is to get your ideas down on paper so you can see how they all work together. The Orange County SBDC has assisted business owners in the completion of 1000s of business plans through our one-on-one confidential coaching.
The Orange County SBDC provides business owners and executives with one-on-one confidential business consulting to the North County business community. If you have a business in North Orange County or are planning to expand into North Orange County and need assistance with your business, we can help in the following areas of expertise: Startup, Business Planning, Growth/Expansion, Operations, Management, Sales, Marketing, Finance, Access to Capital, Technology, and more…
Qualified businesses are able to receive assistance in many business disciplines at no cost and no catch.