If you have a great idea for a startup business, you will need to write a business plan to help you attract the capital, people and resources necessary to get your startup off the ground. Some “experts” question whether a business plan is a useful tool beyond this step in a company’s lifecycle.
We here at BizPlanIt, as well as many experienced, successful entrepreneurs across the globe would strongly disagree. We believe that a business plan is a required tool for all companies, even well established, successful companies. Here are ten great reasons why your company should write a business plan today:
- In many instances, a company’s financial goals are so ambitious that growth cannot be funded from internally generated cash and therefore additional external funding is required to sustain the growth rate. External funding sources will almost always require an up-to-date business plan.
- A business plan that is constantly reviewed and discussed internally keeps the entire management team committed to a common set of goals by forcing executives to reconcile any differences they might have.
- All enterprises need a way to communicate vision, mission and values to suppliers and customers. The business plan is the perfect way to periodically keep your most important constituents aware of your goals and objectives.
- Markets are constantly evolving. An informed, agile management team will capitalize on this evolving landscape by aggressively making changes to their company’s pricing, packaging, distribution, technology, etc. The business plan anticipates these changes and allows for an easier transition.
- In today’s marketplace, strategic partners have become a necessary and important weapon in every company’s arsenal. Strategic partnerships work best when each partner is aware of the other partner’s direction. Obviously, an exchange of business plans is a requisite part of any meaningful partnership.
- Your company’s business plan is the best place to showcase your management team. The corporate landscape is littered with companies with great products and huge markets that either didn’t make it or didn’t reach their potential because of a management team that did not have the skills, talent or experience to achieve its goals. Your business plan is a great place to show off your most important assets.
- Every enterprise has competition and ultimately, your company’s success will be determined by how you differentiate your business from that of the competitions. Your business plan will explain how you differentiate through better products and services, better technology or perhaps by understanding and caring for the customer better.
- Your company’s business plan gives you the opportunity to periodically review your business model…how you make money. Do not let yesterday’s leading edge product become tomorrow’s commodity. Use the plan to anticipate the future and respond accordingly.
- Use your business plan to periodically review your company’s goals. Make certain that they continue to be achievable or, make sure that they continue to be a stretch.
- Periodically review your plan’s financial forecasts. Ask yourself if they continue to be relevant. Are revenues and expenses tracking? If not, why not? Make changes now.
Indeed, a formal, continuously updated business plan is an important external as well as internal document. Take advantage of its many benefits and let the plan take your company in the direction that you want to go.