5 Reasons Why Your Company Needs A (Good) Business PlanPosted by Jessica Oman
Yes, we know business plan writing can be a difficult and time consuming task. If your business is pre-launch, and you need financing or investment to get going, you probably already know you need a business plan (and we can help). But this post is about business planning for established companies. If you’re already going great, why should you write or revise your business plan?
1) Times are Tough
No matter where in the world you operate your business, economic uncertainty is a reality. To stay competitive and keep your revenues steady, you need to know what your market is up to. Are your customers likely to continue buying your products and services the same way they always have? Are they spending less? Are their needs evolving? Part of a great business plan is a thorough market analysis. An industry analysis is also a key component of a business plan. How is your industry adapting to economic shifts? What is the supply and demand scenario for your products? Are there new entrants into your industry? What are the biggest challenges your industry is facing? How are those different from previous years?
2) You Need Money
Your business needs money in order to grow, and you might have to get that money from a bank or an investor. Even my clients whose mother or father is investing in their business require a business plan. The person who is funding your initiatives absolutely needs to know that you understand your business and you have a vision of where it’s going to go, even if you have historical data demonstrating previous success.
In order to engage new stakeholders and get them excited about your business, your business plan must be current, succinct, and relevant. It needs to be accessible and easy to read. It needs to follow up on your previous objectives by showing where you reached your goals and where you had trouble.
3) The Future is Foggy
Since we can’t predict the future or see exactly where our businesses are headed, the best we can do is plan out a path and do our best to follow it. You might already be making good money in your business but you can create a guideline that shows that you know exactly what’s going on now and that you are adaptable should your industry change. This lack of foresight is being blamed for some of the problems that Research in Motion is currently experiencing; critics say the company could have foreseen that the technology that branded them as innovators would not sustain the company forever.
4) Your Idea Already Exists
Whatever it is that you want your business to do, chances are that someone else is already doing it, or something like it. The chances that your product is unique are slim, and even if it is unique, someone else will probably follow soon behind you. You need a plan to differentiate yourself from your competitors, because like it or not, if you don’t already have them, you will. Knowing your competitive advantage and incorporating that into a business plan that you can refer to any time you face a business challenge is key to ensuring that you will continue to make money as your direct and indirect competition evolves.
5) There is No Yellow Brick Road
Even if your business is growing, the long-term path is usually not clear. How long can you maintain your current growth rate? Will the market become saturated? Will you have to diversify in order to keep growing? You need to know this stuff, and so do the people who work for you. A business plan will be helpful for your employees and internal stakeholders; it will instil confidence in the people who work for you. They will know that you’re not floundering, that you’ve considered the future of the company and how your people play a role in that development. A business plan is an exceptional internal document to share confidentially inside your company.
A business plan can be a powerful tool for growth, if it’s thorough and well-written. Don’t put it off!