Whether you’re a brand new startup, or have been trading for a while now, it’s important to have a business plan. Many businesses seem to put this off, or completely avoid writing one altogether. However, the phrase “Fail to plan, plan to fail” really does apply here.
A business plan gives your business direction, ensures you understand your objectives, market and customers. It can also help you raise capital, review your ROI (Return on Investment) and much more.
Once you’ve worked out how to write your business plan and polished it off, don’t just tick it off your to-do list and forget about it. It’s important to keep it nearby and refer back to it regularly. In fact, here are 5 things you can do with your business plan:
- Follow it – A business plan outlines your idea, objectives, goals and much more. So, when managing your business, instead of jumping in headfirst with a blindfold on, read through your plan and make sure you understand it inside and out. Your plan already has everything mapped out for you and so by following it, you can manage your business more effectively, be better organized and stay on track.
- Create an action plan from it – Although your plan may already include a lot of detail, take your objectives and break them down into more manageable, actionable chunks. An action plan can help you understand what to do next, what your key milestones are and you can assign each task to a specific person, helping to move your business forward.
- Show suppliers – With some careful research, you may have a list of suppliers you plan to use. However, as a new business, or business in its early stages, suppliers may be reluctant to supply to you or provide a good line of credit. With the help of your business plan’s cash flow forecast and growth forecasts, you can show suppliers you will be able to pay your bills and potentially give them even more business in the future as your business develops.
- Take it to a bank / investor – In the early stages, you may need an extra boost of capital to help get your start-up off the ground. Whether you plan to go to a bank, venture capitalist or angel investors, prospective investors will ask to see your finances as well as an up-to-date business plan when you pitch to them. It’s therefore important to have a professional business plan which clearly explains why a lender should invest in your company, what your USP (Unique Selling Point) is and why people will buy from your business.
- Regularly update it – Remember that your business plan isn’t a static document and things change. Your business may change, the market may change and customers may change. It’s therefore important to review your business plan on a regular basis (annually, monthly and even daily). Update it with your new objectives and goals to help you stay on track. Also, if you need additional financial support in the future, you will subsequently have an up-to-date business plan ready to show investors, which can help to minimize any daunting delays.
Have you written a business plan? We’d love to know how you’ve used it to help drive your business forward.
Author: Elizabeth Harmon is a writer for Open Colleges, one of Australia’s leading online education providers. After working in a number of companies she decided to set up her own business as a self-employed Social Media Consultant. She has a number of years experience in the field and has worked with a growing list of clients around the world, helping to build successful social media strategies, create effective content and much more. You can follow her on Twitter @Liz_Harmon or see more of her blogs here.