Business plans are normally the first thing that you do when starting a business. Your business plan marks the point at which an idea gets turned into reality. You map out what your business will entail, how it will operate, how it will market itself, and how it will proceed financially. When writing your business plan, you’ll come to understand the people you’ll be trying to attract, what differentiates your business from those operating in a similar space, and the reason why your business will exist in the first place.
Once you have created this document, and got to the hard work of setting things in motion, you may leave the document to wither away on some hard drive, or in some filing cabinet. But your business plan has a number of virtues that you should utilise:
If you’re looking to rapidly expand your business, it’s more than likely that you’ll want to approach equity investors. Venture capitalists love business plans – it gives them a great idea of your dream, and brings them into the way that you think your business will grow. The same logic goes for banks. Banks are typically far more cautious, and will rely more on your financials, but your business plan will give them a sound look at your specialised market knowledge, making the odds of a business loan approval more likely.
If you’ve been in operation for a while since the drafting of your business plan, you should update it so that it better reflects the reality of your business, as well as the lessons that you’ve learned and the new shape of your plans for your business. Try to update every six months, so that you can present a fresh document if opportunity knocks.
Reviewing your business plan can be a crucial element for evaluating the relative success of your business. You can use the document as a foundation from which to reflect. Looking at the goals and vision set out in the document will spark ideas on how to further your business, and with the knowledge that you’ll have gained in the interim, you’ll be in a better position to lay out the next steps that your business can take.
Use your business plan as a way to attract top-shelf employees. If you’re a small business with aspirations for greatness, you’ll need to rely on your business’s potential to attract the people that can take you to the top. Your business plan can help potential employees understand your vision for growth, and get them on board, even though the salary may be less than a more established company. Your business plan contains your dream – if you believe in it, so will others.
Alliances and selling
If you’re approached to sell your business, and feel like it is the time to do so, your business plan can be useful when evaluating and negotiating a selling price. This document provides information that is useful for a prospective buyer – from market research to forward plans. If you’re looking to go into an alliance with another company, your business plan can provide the foundation from which cooperation can proceed.