16 Reasons Why You Need a Business Plan

Business planning may be a boring topic for some, but for me planning isn’t just interesting, it’s an essential element of any successful business. A business plan doesn’t have to be a formal 100 page document, it can be a spreadsheet, a series of post its or scribbles in a notebook. Below I have outlined some of the top reasons why business planning is important.

1. Prove you are serious

If you want to prove that your business is serious and not just a hobby, a business plan is the perfect document for you. It showcases your ideas, plans and innovations to your family, investors or banks so they can understand the thought and planning that has gone into your business. Get your free one page business plan on our blog

2. Create benchmarks for yourself and your business

Business planning is a great way to help you create benchmarks for your business. It gives you the chance to sit down and think about what profit you need, what your cost of sales should be and how much you would ideally spend on staff.

3.Put your ideas into words

Another great reason to have a business plan is that it helps you to put your ideas into words. Ideas without a plan to implement them will remain ideas. So why not get writing? It doesn’t have to be formal, a scrap piece of paper will work just as well.

4. Confirm your predictions

A business plan is a GREAT way to confirm whether or not your idea is a good one. A plan makes you sit down and research what else is on the market, how much it costs and helps you to invent ways that you can do it better.

5. Understand your industry

Business planning helps you to better understand your industry. It gives you a chance to research industry trends, opportunities and technological advances that could enhance your business’ profitability and success.

6. Identify and understand your customers

A business plan helps you to understand your customers. Who are they? Where do they spend their time? How can you help solve their problems? Do you have more than one type of customer? All these customer questions can be answered with a little research and time invested in business planning.

7. To help you to focus

Focus… it can be difficult but having a plan can help you to focus on what is important and what you are trying to achieve. It is easy to get distracted by the latest “shiny red ball” idea but having a plan helps you to keep laser sharp focus on your plan and what you are trying to achieve.

8. To get finance

If you are needing to get finance, the financial institution will ask for a business plan for them to understand whether or not your business has a plan for the future and how you plan to get there.

9. To organise yourself

A business plan is a great chance to sit down and organise yourself. It helps you to set out a plan for your work which will help you to achieve success.

10. Get buy in from employees, family and funders

A great reason to have a business plan is to get buy in. Buy in from business partners, employees, family members and even financial institutions. A business plan is a great way to put your vision into words and help others understand why you have gone into business and what you hope to achieve.

11. Hold yourself accountable

A business plan forces you to hold yourself accountable. A business plan helps you put your ideas into words and forces you to set goals.

12. To set goals and milestones

A business plan is important because it helps you to create milestones for growth. It helps you to stay on track and focus on tasks that will help your business move forward.

13. To attract talent

If you are trying to attract the best of the best talent to your business a business plan will help you to articulate the highlights, plans and ideas that set your business apart as an employer.

14. To create a blueprint for your business

Another great reason to have a business plan is to create a blueprint for your business. A business plan helps you to write down where you are and where you are headed and map out how your business works.

15. To find new opportunities (and threats)

The business planning process is a great way to help you to identify opportunities for your business. These could be new ways to make money, relationships that require attention or completely new business ideas. A business plan can help you identify these opportunities and plan to take advantage of them.

16. To help you prioritise

A business plan is a great way to help you prioritise. It helps you to set goals and ways to achieve them. It forces you to sit down and prioritise what you HAVE to achieve and what it would be nice to achieve. It’s a great chance to set yourself stretch goals and create a path to achieving even those.

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Any advice in this blog is general in nature and is intended for information purposes only. For personalised advice please contact your accountant.