Is Writing A Business Plan Really Worth the Trouble? – Why You Should Write Your Business Plan
Often times, you get to see individuals asking someone to “do a business plan” for them. When the business owners are phoned up, and asked what they are looking for, their response most times is usually that they have a business idea and have done some informal research and it seems like a good idea ... Continue Reading
Often times, you get to see individuals asking someone to “do a business plan” for them. When the business owners are phoned up, and asked what they are looking for, their response most times is usually that they have a business idea and have done some informal research and it seems like a good idea and they just need a great business plan so they can start or grow their business.
Now some people might say that it sounds like a good business opportunity. Charge them a fee, ask them to email their thoughts and informal research, and whip up a business plan using a template that has been earlier created. If they want changes, charge them an editing fee until they are happy.
This would probably earn a fairly nice fee but it would not be doing them proper service in the long run.
Here’s why that is so. A business plan has many functions:
• A business plan can serve as a vehicle to approach finance houses for finance.
• It can be used to attract investors.
• A business plan can be used to get business partners involved.
• It can give you a road map to move forward.
• A business plan can help you think your way through your business idea.
Having a business owner write the business plan themselves initially helps immeasurably with the last two points. Most importantly, the last point. When an entrepreneur takes the time to work through the different areas of a business plan, it forces them to concretely think around the different areas that are important such as:
• Doing proper market research that is quantifiable.
• Knowing who their competition are, what they are offering and how the business owner can differentiate himself.
• Finding out who their ideal clients are, why they buy and how they can be found.
Some other questions this process forces the entrepreneur to ask which will be beneficial to the business in the long run are:
• How much finance do we need to start off and what will our cash flow projections be going forward?
• Have we priced correctly taking the above into account?
• What resources will we require, in what order and when?
As new business owners are putting these items down on paper in the form of their business plan, it’s forcing them to pause and do the exercise. This will help them in many ways such as:
1. It forces them to get used to the idea that starting a business is hard work.
2. It shows them whether it’s a viable business idea.
3. It makes them come to terms with financial data, cash flow projections and financial systems.
4. It sharpens their business knowledge, terminology and acumen.
5. It teaches them how to type a proper business proposal for later on in their business growth cycle.
6. It allows them to become intimately involved with the whole idea so that they can rattle off a simple elevator pitch if asked what their new business it about.
These are important skills and areas that the new entrepreneur must come to grips with. Even if they produce this great business plan and afterwards stick it in a drawer, it would have allowed them to grow as a person and business owner. I’m not saying that it should be stuck in a drawer, but that it’s a good way to formalise a great idea.
This business plan can then be used as the basis for a 1 year strategic plan going forward, can be used and adapted for financial reasons such as applying for finance of investors, and can be a living document to form company values moving forward.
A business plan does need to be a living document going forward, and should be changed and adapted as the business grows and market conditions change, product lines expand, change and grow.
A business plan can also serve as a great retrospective tool, to look back after a year and see if you are in line with your dreams, what changed from your ideas and allow you to be introspective about the business journey.
If you’ve done this business plan, and are not comfortable with some of the sections or areas where you feel that you have weakness or you are uncomfortable with some of the language that you’ve used, then it would be an idea to contact a professional business plan writing company to polish your business plan.
They’ll have something to work with you and it will still show your personality and passion. When investors or financial institutions read your business plan, they quickly pick up whether you’ve had a hand in it or if it’s an off-the-shelf version. This may directly or indirectly influence how they think about you as the business owner and the type of person you are and how it reflects on the type of business you’ll run.