Is having a business plan important?
The short answer is yes…very important. A business plan is a critical planning and measurement tool, both if you’re thinking about starting a business or already running one. People often think of business planning as a boring exercise, and that at the end you’ll have a massive document that sits on a shelf somewhere. If you’re doing it properly that couldn’t be farther from the truth. A business plan should be a roadmap that you refer back to on a regular basis, and update as your business grows and changes.
Have you ever thought:
“Why do I even need a business plan? I know how to run my business.”
“It is super overwhelming and I don’t even know where to begin!”
I have been there and let me tell you, I understand how daunting and impossible it feels.
However, business plans generally serve three important functions:
1. Aligning yourself and your team with the vision/mission of the business.
2. Setting measurable goals and tracking your progress against those goals so you can hold yourself and others accountable.
3. Showing 3rd party users (banks, investors, etc) that your business is a good investment, can support investment, and has a plan to achieve business goals.
Lets dive deeper into each of these functions:
1. It defines your vision and mission …. Your why
Your business plan will eventually have all kinds of detail about objectives, target, and measurements, but the most important function of it is also the simplest. It defines what you want to be and why. Not only is your vision and mission important for you to define, but it’s critically important for anyone else that comes on contact with your business to understand. Customers will recognize your values, employees will understand where the company is going, investors and others will be able to buy in to the plan.
Principle of displacement: everything you do rules out something else that you don’t do.
Displacement matters because you can’t do everything and you can’t cater to everyone with your business. By defining your vision and mission, you are choosing what are the most important goals and from that will be how to focus your resources accordingly. Every goal you set and thing you measure in your business should contribute to achieving your vision. Full stop.
If you are constantly after the new and latest thing you may lose focus on the things that matter most. It is important to not lose your core if you are looking to expand. Your business plan outlines your vision. If your choices aren’t in alignment with your vision you need to question why you are doing them and determine if they are the right direction for your business.
On the other hand, if you are not making the necessary changes or jumping on an opportunity for new markets or products, your business can suffer. By defining who you are when where you’re going, your business plan will allow you to make smart, calculated business moves.
2. Setting goals and measuring progress
A well-run business requires setting up specific objectives, assigning responsibility, timelines, and measuring results. It is surprising how many existing businesses manage without a plan. This is a risky game to play with your business. The short cut is doing all the planning in your head, but it becomes hard when it comes time to let your team, investors or anyone else understand what you are doing and where you are going. In order to organize, plan, communicate and prioritize better, be strategic. Setting a business plan into motion is going to make everything clear instead of winging it!
Your business plan should be clear and provide a roadmap for your company. Without a plan, you’ll find it more difficult to communicate your vision and see a path to growth.
3. External users
A well developed and concise business plan is a powerful tool for you and your team, and outside stakeholders know that too. That’s why it’s almost always asked for when a business applies for financing (debt), raises equity (investment), and applies for grants or other support programs. They will want to see that you have a clear vision for your business, objectives that are in favour of that vision, targets to measure success, and a realistic plan (operations, marketing, finance) for how to meet those targets.
If you are unsure of where to begin with a business plan, here are a few great options for you to get started:
Find a mentor
If you are lost and unsure where to begin, find someone to mentor you and help guide you on how to write your plan. Seek out what works really well for them and what was not as useful. Business plans combine marketing, operations, and finance functions, so someone with experience in these areas is key (especially finance and building financial forecasts).
You have a great idea, loads of experience in the industry, but you’ve never had to produce a document like this before. That’s okay because Futurpreneur Canada has a fantastic business plan writer you can find here. Templates are a great way to stay organized and see all the areas you need to take into consideration when writing a business plan. SCORE also has some great financial templates you can find here.
Hire someone to help you
If you are still completely lost after trying to write a business plan yourself, the next step is to hire someone to do it for you or someone to coach you through it! One really great resource is using Upwork to help you find and work with top freelance marketers, business plan writers, designers, developers, and other professionals. However, I would caution that many freelancers don’t have a deep understanding of all the functional areas (marketing, operations, finance) of business. These are key considerations that need to go into your business plan. Personally, I would do the research myself on the industry, my competition, and how my business fits (positioning), and bring in a CPA to help with the financial forecasting.
Remember that you need to be the expert in what your business opportunity is!
Your business plan can be as in-depth or as overview as you would like it to be. The important thing is to ensure you have one so you are planning for future opportunities. Business plans will come in handy if you are looking to forecast, expand, secure a loan, bring on an investor or sell your business. It can be time-consuming but so rewarding and essential if you are going to survive the start-up stage.
The comment section is open to anyone, check it out below! I would love to hear your thoughts and what has worked for you when writing a business plan. If you have not yet written a business plan, what is stopping you?