A business plan is an important tool if you are planning on starting a business or perhaps thinking of new ways to grow your current enterprise. Your business plan will serve as a guide in your decision-making. A business plan will also help you in finding, defining, and polishing the competitive advantage of your business. Your business plan will identify if you have a competitive advantage in the market, otherwise, competing is not advisable.
Business plans are like road maps or your GPS – they make your trip more efficient. Although you can proceed with your startup business without a business plan, there are high chances of getting lost along the way. On the other hand, if you have a road map or a plan to guide you, you will remember where you are headed and you can reach it faster with more effective strategies.
Creating a business plan will give you a bigger picture and provide more chances for success. Here are some roles of a business plan:
1. Critical decision-making
A business plan is especially important in making critical decisions. Entrepreneurship is a series of decision-making, conflict-resolution, and crisis management. An entrepreneur has to make quick decisions because stalling to consider all possible consequences is not always a good option. A sound business plan will allow you to determine what is the answer even before conflict or difficult situations arise.
2. Smoothing things out
Creating your business plan will help you identify what are the bumps in the business and what are the questions that need to be answered. After this, through the help of your business plan, you will be able to think of solutions and strategies to help you smooth out the kinks or potential gaps in your business.
3. Preparing for the big ones
A lot of small and medium enterprises do not get to last for five years because they do not prepare for the big mistakes or the most common mistakes that cause the failure of a lot of businesses. These common reasons for failure are addressed in the business plan. Here are some of the most common mistakes:
- There is no market need, which means nobody needs or wants what is being sold
- There is a lack of capital or the company runs out of money
- Your hired team or employees are not the right people for the business
- Competition around you is rigid resulting in a very unprofitable situation
- Prices for products or services are either too high or too low
4. Recognizing viability
A business plan will help you recognize if your vision is viable in the market. A business plan can ground your lofty business idea and acknowledge it as having sound business sense.
5. Setting objectives
Your objectives and benchmarks set will make you more accountable to your vision and strategy and with a business plan, these goals are made to be more deliberate and substantial. A business plan will also help communicate to your team the same objectives and benchmarks. So whether you are managing a small or big team, having a plan will also make your employees aligned to your objectives.
WHAT’S THE NEXT STEP?
1.You can find out more about what a business plan is and its importance with the international best-selling book CHAOS; How Business Leaders Can Master the Power of Focus. Get your FREE copy HERE
2. Use our FREE business planning program FOCUS Yourself; A 7 Module Business Plan Program. This is not a business plan template, it is a full business plan that is EASY and FAST, making your plan SUSTAINABLE and entirely PRACTICAL. Start your business plan NOW
3. Not sure why you need a small business plan? REGISTER for a FREE FOCUS Discovery Consultation where you will talk business, your business, with international best-selling author James Burgess
4. Challenge yourself to FOCUS Your Business In Just 30-Days and learn how to build a business that will THRIVE not just survive with our FREE webinar HERE.