What exactly is a business plan?

Starting a successful business takes more than just a great idea. Perhaps one of the most common pitfalls in growing a business is the lack of a business plan.  A business plan, simply put, is a document that details all the core information about a business, its vision, goals, strategy, and roadmap for growth.

In this way, you can consider a business plan as a type of blueprint for a business.

Why do I need a business plan?

Combining your brilliant idea with a strong business plan translates your vision into a strategy that’s ready for action! It can be tempting to jump straight into other elements of starting a business, like building glossy websites and printing fancy business cards!  But ultimately these will not help you make decisions for the business. In addition to this, a plan will also provide a guideline to the steps and resources you need to achieve business goals, as well as a timeline for anticipated results and you may discover that those business cards or websites could have waited!

And if you’re not yet convinced, read on…here are some rather compelling reasons why a business plan is important and how it can be used to set your business up for success:

  • You will be forced to think: Creating a business plan takes careful consideration of any strategies you will undertake to sow the seeds to grow your business. This can also help you uncover new opportunities that were previously unknown or not considered.
  • Prove you are serious: Any interested parties such as suppliers may ask probing questions that you are likely to have answered had you written one. Demonstrate to them that you are serious and committed to growing your business by knowing the answers and showing you are organised and efficient and likely to be a reliable partner.
  • Understand your customer: Essential to a successful business is a strong understanding of your customers. Business plan will help you answer questions such as, why would the customer buy your product or service? Why are they going to buy from you and not your competition? What is your competitive advantage? Having a thorough understanding of who your customers are or ensuring you start researching, will help you to offer better products/services, but also reach them via marketing in a more impactful and the most appropriate way.
  • Determine financial viability: Understanding how you will earn revenue, what your ongoing costs to run your business will be, when you will make profit and considering what will be your current and future financial needs is an important exercise. It will force you to consider what your immediate needs are as opposed to the nice to have expenses. Business plans not only help you determine if your product and service offering will be profitable but also help you assess long term growth potential.
  • Establish business milestones: Setting milestones are not only motivating but will also help you focus your efforts and allow all team members to understand your vision. Viewing your long-term milestones will help you to establish short-term strategies and help keep you focused and on track to achieving the big goals.
  • Attract investors and lenders: Perhaps the most exciting reason of all to spend time working on your business plan is to attract investors! A plan will answer questions investors will inevitably have about your business – and do expect them to review your business plan thoroughly!

Writing a business plan is an essential part of this journey because it demonstrates you are serious about your product and service and intend to succeed – and that’s a powerful mindset to possess, no matter what you’re selling.

As the founder of Fincraft, I take pride and great satisfaction in helping people like you get their business dreams off the page and into reality by making informed, sensible decisions.

Book in a call and let’s chat about creating your very own business plan – it’s never too late!