Remember back to your high school days and the memory of being assigned the task of writing a 30 page term paper in one of your classes. If you were like most of your peers, the mere thought of this assignment brought tears to your eyes.
Fast forward to today. You are now an entrepreneur starting a business or seeking outside capital to grow your company. You realize with dread that you are going to have to write a business plan to advance your company forward. In fact, the mere thought of writing a business plan most likely conjures up memories of your high school days preparing term papers.
Don’t fear. Resist the urge to run. Yes, I admit that developing a plan is a lot of work. However, the business planning process has so much to teach you about your business and the opportunity in front of you that it is well worth the time and effort required to see the process through to the end.
Having helped clients develop business plans since 1997, our experiences have taught us that the benefits of the business planning process include:
1. Providing you a 360 degree view of your company, allowing you to examine its viability and potential for growth and success.
2. A business plan is powerful tool for ensuring that the founders and management team are committed to a common set of goals by forcing individuals to reconcile any differences they may have into a unified plan of attack.
3. A business plan is an excellent method of communicating your vision, mission, values and goals to the stakeholders that will help you launch and grow your business – suppliers, partners, customers, employees and board members.
4. Helps companies gain a more thorough understanding of the opportunities and challenges in their market and industry, and craft strategies and tactics that will directly respond to customer needs.
5. Your company has competition, and ultimately your success will be determined by how you set your company apart from that of your competitors. A business plan empowers you with valuable competitive insight and enables you determine how to differentiate your products, services and value proposition.
6. The better you understand your business the more effective you will be in creating the right management team for your company. The landscape is littered with companies with great products and huge markets that either didn’t make it or didn’t reach their potential because the management team lacked the appropriate skills, talent or experience to capitalize upon its opportunity.
7. A well thought through business plan will lay out a comprehensive strategy and time-line for implementation and operations of the company in the early and emerging stages of growth.
8. Allows you to examine “what-if” scenarios and create back-up plans should your Plan A turn out differently than you originally expected – a situation which happens quite frequently.
Enjoy the business planning journey. Take time to write a business plan that you are proud to put your name on. It is well worth the effort.
For more information on why you should consider writing a business plan be sure to check out and download BizPlanIt’s Free Virtual Business Plan Template or Sample Business Plan.
About the Author, Scott Pollov
Scott,
Is it worth going through the process of producing a business plan when you are a one-woman operation? This sounds fascinating. I’ve never thought of drawing one up, but you have listed some powerful benefits. I’d like to know more:)
Darlene Davis recently posted..Running on Empty
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Scott Pollov Reply:
August 5th, 2010 at 12:48 pm
Darlene. A business plan can be a powerful tool for companies of any size – even a one-person operation! I have a business plan that I review and revise for our firm every month or so. This planning document enables me to stay organized, helps me make better short-term and long-term decisions, and ensures I stay focused on my stated goals for the business. I look forward to learning more about your business!
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Please call me at your earliest convenience at 516-233-1094. There is something that I would like to discuss with you that might be mutually beneficial. Thanks
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Hi Scott,
Thanks for teaching us the other, more beneficial, side of doing a business plan. We often only see the hard work involved and feel it is only for someone else’s benefit. But as you point out 8 times, it is really mostly for the benefit of the business owner and if we fail to go through the process, we will be missing some of the keys to our success.
My favorite is the 360 degree view to look for all the opportunities for success and growth. It sounds like the most important of all of them.
Thanks for sharing your expertise on the significance to the entrepreneur of writing a business plan.
Keep on making us not miss all the benefits to us.
Dawn and Dave
Dave and Dawn Cook recently posted..Use Metcalfe’s Law to Build Your Network
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Scott Pollov Reply:
August 6th, 2010 at 2:48 pm
Dave and Dawn. Business planning is hard work. If your goal is raising capital, simply filling in a template may do the trick. But if your goal is to create a comprehensive roadmap for the future, then throwing yourself 100% into the business planning process will always yield best results. Thanks for stopping by. We hope to see you here again soon.
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Hi Scott,
This is something that I have not done, but I agree – it’s very important. We constantly hear that we need to know where we’re going, or we will never get there. A business plan is like a roadmap, complete with directions and an established destination.
Thanks for the reminder, and for the great tips. I’ll have to put this on my “to do” list!
Kathy Jodrey recently posted..Emotional Clearing With EmMatrix…Thank You Sandhan! Summer Scenery Series 4
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Scott Pollov Reply:
August 6th, 2010 at 2:46 pm
Kathy. Thank you for the comment. Business planning is a powerful tool for all entrepreneurs. Keep us posted on your plan!
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Hi Scott,
It’s easy for us lone wolf entrepreneurs to fly by the seat of our pants. Finally it becomes inescapable that even we loners need a business plan, else we end up going in circles. Thank you for reminding me the importance of sticking to mine.
Carolyn from TSA
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Scott Pollov Reply:
August 6th, 2010 at 6:38 pm
Carolyn. I could not agree more with your comment. Thank you for sharing your thoughts. We speak with many solo entrepreneurs who are struggling to move their companies forward, and find that putting together a business plan helps them overcome challenges and start down a new path toward success. Please be sure to stop by our blog again!
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Scott’s 8 reasons are “spot on” for writing a business plan. I’ll add a 9th reason — bringing in a 3rd party to either write the plan or review the plan is a really smart move. They provide an objective perspective, and more often than not, will see gaps or problems in your strategy (and cash flow assumptions specifically)that you just don’t see, using your nicely rose-colored glasses that all entrepreneurs wear.
It may be more costly, in the short run, but I’ve looked at too many business plans that just weren’t good enough that an entrepreneur wrote. His or her friends and family just aren’t as critical in sharing their real opinions unfortunately, either.
Rob
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Scott Pollov Reply:
August 10th, 2010 at 3:03 pm
Rob. Thank you for the comment. As a business plan consultant, I could not agree more with you comment. Every business plan should be reviewed by an objective third party who is not afraid to provide hard hitting constructive criticism. It can not only help improve your business plan, but may improve your business.
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Hi, Scott.
This is a great list of advantages for writing a business plan. I’d like to add to number 2: Ensuring that the founders and management team are aligned with regard to goals. I also find that a written plan is a valuable tool in holding management team members accountable for the financial results agreed to in the plan. If specific goals and responsibilities are spelled out in the business plan, it’s easy to track who’s achieving their goals and who’s not. Accountability is the key to getting the results you desire. And a written business plan enables you to hold team members accountable for results.
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Scott,
This post got me thinking about how business planning was so useful to me when I was back working in brand management with a couple national brand companies. As an ongoing management practice, I always tracked my brand’s monthly financial performance vs. the plan. If my results started falling short of the goals in the plan, I was able to make changes to my marketing activities, sort of a course correction, to get my financial results back on track. The business plan allowed me to have an “early warning system” so that I could quickly get my business back on track.
John Coyne recently posted..The Most Important Thing You Need to Know about Marketing
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Hi Scott,
All excellent points as to why we need to write out a business plan. When someone goes to all that work to clarify what they intend to do, and how they intend to do it, my bet would be that they would indeed succeed. Focus is a powerful tool and writing a well thought out plan brings focus.
Great post. I’m glad I stopped by to read it. It’s probably time to update my business plan as I am starting to add more services to my business. I could use some focus and planning to insure I’m traveling down the right path.
Deb Augur recently posted..Becoming a Super Affiliate Is Easier Than You Think
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Scott,
Great list! And we especially like how you’ve added in there that we should enjoy the business plan process. It’s way too easy to get hung up on the negative and look at things as if it’s all work. Anything can be enjoyable if our attitude is on track.
Thanks,
~ Pat and Lorna
http://TheCoolestCouple.com
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Hi Scott, this is a very valuable list of benefits about why writing a business plan is important. I hear in a few of the comments questions about whether this works for solo-entrepreneurs. I say definitely yes. I have a clear strategic plan, that creates my 360 degree view, keeps me on track with my vision, mission and legacy, and allows for my growth and success.
My favorite book, The Passion Test, says, that “when you’re clear, what you want will show up in your life, and only to the extent that you’re clear.”
Thank you for these very solid tips!
Beth Allen recently posted..How to Create Lists on Facebook and Optimize your Experience & Effectiveness
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I love that you offered the template for creating a business plan. The tips and advice contained in the template will really help when I create my plan. I really appreciate this because, like you stated in your post, I’ve been avoiding this process because of the difficulty level. Thanks for making it so much easier.
Wendy
Wendy Hewlett recently posted..The 11 Forgotten Laws- 8 – The Law of Forgiveness
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Some great points here Scott. A carefully developed business plan certainly lays everything on the table and leaves you with no lack of communication when presenting ideas to prospective investors.
David.
David Dunford recently posted..7 Proven Tips For Developing An Effective Small Business Plan
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Scott Pollov Reply:
September 15th, 2010 at 12:05 pm
David. Thanks for dropping by our blog. Most investors are still demanding a company have a business plan before they will consider investing. For entrepreneurs, it is a great way to think everything through to ensure you don’t waste an investors time and money on a poorly conceived strategy. Thanks! Scott Pollov, BizPlanIt Founder
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