Whether you are a start-up or are well established, an essential part of your corporate arsenal is a business plan. While they are sometimes seen as a tick box for gaining investors or to satisfy regulation/policy, a business plan can offer significant value, on an ongoing basis. The purpose of this blog is to explain the plans importance, we will discuss the components in greater detail in a future blog.
What should a business plan be?
According to Wikipedia and its cited notes, “In its entirety, this document serves as a road-map that provides direction to the business”. While useful for seeking funding from banks/investors and guidance on goals, operations and projects. This misses key fundamentals on the businesses purpose and importance of developing a business plan; which is using it!
What a business plan typically is
If we consider your business plan as a road-map for your journey it should provide:
The reason why you are taking the journey
Goals, objectives, strategies
The manner in which you will achieve them (values)
Market research
Service profiles and products
Target audiences
Justification for your journey (feasibility/need/SWOT)
Financial forecasts and actuals if available
What they normally miss
For the plan itself, these are typical components. But there is no point developing a plan that gets shelved. The importance of having a plan lies in following, adapting and reporting on it. So other important elements to be considered in your plan are:
Prioritized organizational project requirements
Performance metrics
Investor relation requirements
Change approval processes
Reporting processes
PESTLE/Risk ID
Stakeholder Analysis
Why are business plans important?
Here are the top reasons you should follow, adapt and report on your business plan.
Important benefits of business plans include:
Clarity on how to grow the business
Prioritized direction
Stakeholder and investor satisfaction
Measure whether you are accomplishing your goals, objectives and strategies
Ability to respond to changing markets
Managed risk, costs, timeframes and quality
Knowing where you stand and where you are going
Increased likelihood of success
Finding performance gaps
Removing roadblocks
Understanding your floating line
Pitfalls of not having a plan, or managing it (to name just a few):
Loss of funding/respect/reputation
No direction
Project failure
Doing the business, instead of growing the business
Loss of work/life balance
Summary
Organizations are evolving and understanding the importance of business plans for different reasons. In larger organizations multiple business plans roll-up to strategic plans. Make sure yours doesn’t get shelved and helps to continue to grow your business after it is approved. We have management and dashboarding tools available, with no licence fees, to support ongoing management and reporting of you business plan, and can provide services to establish your plan, if required.