M Morgan-Bellinger asked:


Surprisingly, many people claim that a business plan has no value & is just a waste of time – they tap their heads knowingly saying that it’s all in there.

Well this notion can be dismissed as being without any logical basis as every single activity, from the day to day running of your business to long term projects requires planning, investigation and analysis.

Having a business plan is just as essential for your business as it is knowing where you are going when you drive out of your house, ie if you don’t know where you’re going, you aren’t going to make much progress in getting there.

So whilst its fairly obvious that any business, new & existing, needs proper planning, there are some less obvious reasons for this.

5 Top Reasons Why You Need a Business Plan for Your Business

To Test the Feasibility of Your Business Idea

Formulating a business plan can save you a great deal of time & money as it will soon reveal that your business idea is untenable if this is in fact so. Whilst an idea for a business often sounds like a real winner, it can often be found wanting & therefore discarded at the marketing analysis or competitive analysis stage. To Secure Funding

Any potential investor in your enterprise will want to see a well developed business plan before investing, ie, they need to ensure that the return on their capital will be secure. This also applies to established businesses as they often need capital for expansion or to carry them through market downturns. The same applies to lenders if you need to get a short term business loan. Targets

A business plan must contain realistic targets, short, medium & long term, that should be aligned to the core objectives & mission statement of the business. This gives the entrepreneur the framework as to what must be achieved. Focus

Reducing your well though out ideas to writing will ensure that you focus your efforts, set objectives and formulate company direction & policies. Growth

Without proper planning & growth objectives you will be in the dark as to whether you are on track with your business’ growth projections.

So whether you’re just starting out, need funding or want to monitor the health & growth of your business, creating a business plan is essential for the successful management of any business regardless of its size or turnover.

PS.

For your new or established business, you can get all the information you need to Create Your Business Plan here »



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Aaron Lee asked:


What is a Business Plan?

You can pretty much define a business plan as a resume for your business idea in mind. Some may say it’s like your company’s calling card. When you need money to start your business, or when you need an office space, your business plan is what will do most of the talking to convince your investors / lenders or property managers to believe in your business and give you what you need.

Why is it important to have a Business Plan?

The time that you spend on writing a solid business plan will pay for itself in corporate strategic and tactical clarity as your business grows. A solid business plan: (not in particular order)

Allows you to describe your vision / concept in writing, helping your potential investors to understand and believe in you; it serves as a basis for discussion with third parties such as shareholders, agencies, banks, investors…etc. Allows you to identify the structure of your business, giving you the chance to focus on the big picture. Your business plan is the “framework” which your business must operate within. A solid business plan provides a considered and logical framework within which a business can develop and grow with business strategies in the long run (not for just short-term growth). Determines the startup and managing costs. Clearly defines your target audience and provides detailed research on your target market. Identifies potential opportunities and obstacles that the business may encounter down the road. Identifies the strengths and weaknesses of your business and your competitors.

No businesses are the same, and no business plans are the same. Your business plan is like your business blueprint; it should be unique. While it is important to be able to illustrate your business concept well enough for others to understand what you hope to be doing, the business plan is essential for your own use. It is about the process of developing the business plan; the process helps you to focus on exactly what you are trying to achieve. It will give you a lot more clear vision of the entire structure of your business as you develop your business plan through detailed research and planning.

A business plan consists of the following parts:

Executive Summary

Briefly describes the business concept Highlights the important financial points of the business such as sales, profits, cash flows, ROI Clearly states the capital needed to start the business and to expand States legal information about the business, the owners and key personnel.

Business Description

Describes the business structure on how it operates / profits Describes the nature of industry in which the business plans to operate Identifies the business’ current position and future possibilities

Market Strategies

Defines the target market Defines the strategies the business plans to use in order to tap into the target market Describes the pricing of products or services with respect to the demand of the target market

Competitive Analysis

Describes the competitors in your target market and how you plan to obtain your share of the market Analyzes your competitors in the following categories: product, distribution, pricing, promotion, and advertising.

Design and Development Plan

Describes the steps the business will take to carry out its plan with scheduling and cost analysis. Identifies the risks during the development period

Operations and Management Plan

Describes the strategies the business will implement in order to operate and grow effectively

Financial Statements

Defines all the financial aspects of a business.

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