I’ll be honest, I love working with new business owners. Each and every time I meet a new client in our Strategies sector, I get a familiar buzz of excitement in my tummy. I always admire the energy and enthusiasm that new business owners have for their product or service – it’s completely infectious. Quite often though, this relentless positivity can have a negative impact, in fact, It is all too easy for those starting out in business to skip the vital steps that will help them stay on course as their business grows. At Leading Strategies, we know that everything begins with the business plan.
There is a common misconception that a business plan exists simply to attract funding from potential investors. Whilst a business plan is obviously essential for attracting outside investment, this certainly isn’t the main reason for having one. So why exactly is having a business plan so important?
- It forces you to think strategically
The process of writing a plan will force you to consider your business in its entirety. At this early stage, you need to document the strategy for the business finance, staff, sales and general operations and make sure that your goals work across each area. For example, if you plan to have achieved 20,000 sales by the end of year one, with only one sales person, it should prompt you to ask the question of how one person can generate that many sales. Do you need to concentrate more on bulk sales or partnering with distributors or do you need to allow for additional sales staff?
- Your business plan is your road map
A documented plan will identify what you want your business to achieve at specific points in time. It will force you to think realistically and objectively about your offering and will help you set targets and milestones to aim towards. For example, if your plan says that you want 100 customers by the end of Q1, you won’t sit back and passively wait for that to happen – this becomes the objective of your sales force and turns into their performance goal.
- It helps you differentiate from the competition
A comprehensive plan will contain analysis of your competition. It will help your awareness of what is happening in the marketplace and will show how your competitors are behaving. This will identify what you need to do differently, or in some cases what you need to replicate, in order to get ahead.
- It keeps you honest
As a business owner, you are accountable to you! Having a business plan to refer back to will help ensure you are on track. For example, if one of your milestones was to have 100 customers by the end of year 1, it will be very easy to determine if you have achieved that target. If you haven’t, why not? Were there unexpected factors? Did you overestimate? If you have, what lessons have you learnt? What good habits can you repeat?
There are of course many other reasons to have a documented business plan – but if you can think of it as a tool that will help you manage yourself, the business operations as well as attract external parties including investors and employees then you won’t go far wrong.
At Leading Strategies, we work with our clients to create comprehensive business plans using state of the art, cloud based technology. You can find out more here: