10 Reasons You Need a Business Plan Now More Than Ever

July 8, 2020

There is understandable hesitation towards creating a business plan these days. The world seems less predictable than ever, and it feels like there is a new national or global crisis on the horizon every month. You may be wondering what the point is in creating a business plan when it could become irrelevant within days of being written.

Despite these turbulent times we’re living in, when it comes to business, things have always changed and evolved. Though the severity and rate of these changes may have accelerated recently, preparing for change has always been the name of the game. The business plan is an essential early step in creating a solid yet adaptable business.

Writing a business plan will help prepare you for whatever the future may hold whether it can be foreseen or not. It has been proven that having a business plan gives you a higher chance of success and there are many reasons for that.

1. Organizing Your Thoughts & Mapping Out Your Bigger Vision

In order to actually start your brand-new business or any kind of rebranding or expansion, you must organize your thoughts. A business plan forces you to do this. Through the process you will also be mapping out your vision to see the bigger picture. Once you have identified this, it acts a guiding light, keeping you headed in the direction of success throughout the life of your business.

2. Validating Your Idea & Organizing Your Company

Creating a business plan is the best way to ensure your business idea is viable. The process you go through forces you to do the research and backup your idea in a logical, organized fashion. Writing out your plan also makes your business begin to seem tangible and gives you a much better chance of executing on it.

3. Establishing Business Milestones & Facilitation a Step-by-Step Plan

As your business plan begins to take shape it will reveal top-level milestones. These can then be broken down into smaller components allowing you to create step-by-step plans to help you achieve these goals.

4. Identifying Gaps & Maintaining Your Business Focus

This process will bring to light areas you have not considered at all, or important aspects that actually don’t align or make sense when considered together. The plan is the best way to not only organize your thoughts but, make sure you are considering everything you need and that all your plans can work together.

5. Reduce Risks & Avoiding Big Mistakes

Not only does your business plan allow you to validate your idea, it also helps you identify potential pitfalls. There are a number of common things that can go wrong in business such as not setting the right price, competition being too fierce/holding a monopoly on the industry, or inadequate cash flow. A business plan helps to spot these things so you can proactively address them and hopefully avoid them altogether.

6. Overview Your Financial Plans & Calculate Costs

Often, creating the business plan is the first time formally putting pen to paper in terms or your overall finances. This is when many things begin to jump out that will force certain business decisions. As examples, you may learn you need to raise your price or volume, reduce your expenses, or will need additional funds to survive the first few months or years.

7. Accessing Need for External Capital & Securing Financing

In the process of calculating your financials, it will become obvious if you are going to require outside funding. If you determine that you need external capital, you’re already more than halfway there! Any potential investor, lender, or other funder will want to see your business plan. Although you will likely make some changes so it is specifically relevant to potential funders, the bulk of the work is already done.

8. Allows You to Measure Success

Once your milestones and financial objectives are set, they become goal posts by which to measure the success of your business. Being able to compare your actual success to your plans and projections helps keeps you on track and focused.

9. Attract & Align Management

Not only can your business plan be used when appealing to potential managers, it also becomes their guide. The best way to ensure that executives and managers take the business in the right direction, is to make sure they understand the direction. The business plan is the single easiest way to share the bigger vision.

10. Facilitates Pivoting When Necessary

Having a business plan means you have a foundation. If you have a solid foundation, it’s easier to quickly adjust. Things will change. Things won’t go to plan. You will most likely need to adapt at some point for long-term staying power. Luckily, with your business plan already in place, you have an advantaged starting position upon which to begin to change.

Keeping the big picture mentality can be tough when you start to get caught up in the day to day planning and operations of your business. This is especially true when you’re starting, adjusting or rebranding your business. That’s why we’re here to help you plan from the very beginning or when you find yourself need to change and adapt.

At Smirnova Business Consulting, we firmly believe that a proper business and marketing plan is imperative for a business to succeed, stay the course, and focus on growth. Proper planning will not only help you validate your plan and avoid many issues before launch but, it will become the solid foundation on which you can build a new plan when the economy, market, or other forces require it.