The Importance of Having a Business Plan
I’ve lost count of the number of times I’ve referenced business planning when working with clients. As you may be wondering what all the fuss is about I thought I’d put together this article to focus entirely on the reason a business plan is so damn important.
When I asked my college professor what all the big deal with business planning was he relayed to me a scene from Alice in Wonderland and it really stuck with me (not least because I’ve always loved Alice in Wonderland).
“Would you tell me please, which way I ought to go from here?” asked Alice
“That depends a good deal on where you want to get to” said the Cat
“I don’t much care where-” said Alice
“Then it doesn’t matter which way you go” said the Cat
Without a plan you are guiding a boat without a rudder. You are likely to find yourself rushing around without making much progress. Day to day activities are likely to be haphazard and reactive.
A well thought out business plan will map your journey over the coming months and years. You will have a set of end goals as well as smaller goals to achieve along the way. There will be a clear structure of tasks to complete to enable you to reach your end goals. In this way you’ll manage your business more effectively and statistically you are 50% more likely to achieve your goals simply by writing them down!
Having gone through the business planning process you will understand your business….and indeed what you want out of it….as well as your market sector infinitely better and will therefore be much better placed to ensure your long-term success.
Your business plan will include a profit and loss forecast which will help you to be more realistic about what your business can achieve – and indeed any finance you may need to obtain to get it there. This forecast will then be an important part of the information provided to any potential investors or lenders as it will give them confidence that you have thoroughly thought through your business and it’s future.
Bottom line – I firmly believe that a good, well thought out business plan is often the difference between businesses that fail in the first few years and those that become hugely successful, with their owners achieving everything they wished for their business and much more besides!