Can Your Business Survive Without A Business Plan?
Many new entrepreneurs and existing business owners raise the question , Do I really need a Business Plan? The answer is a resounding yes. Although a business plan is usually required to obtain finance , most start-up hire a professional business consultant to write them a business plan and present it to the bank and file it once they receive their business funding.
Here are some valid reasons why ongoing business should always have a current business plan:
The process of planning requires you to survey the business landscape and evaluate any threats and opportunities. The business landscape is dynamic and successful business are able to adapt to the changing business environment. This process also prevents business owners from becoming too complacent , many failed businesses can be attributed to the complacency of the business owners.
As a new business grows and expands you may need to raise additional funding , the financiers whether it is your bank , venture capital firms or angel investors will require a comprehensive business plan. Having a current business plan will provide investors with a great degree of comfort compared to a business where the owners are making it up as they go along.
A well drafted business plan requires the management/owners to think about where the business has been and where it is going - it is basically a forward looking document that forces management to proactively plan for the future.
A business plan enables you to get the buy in of all stakeholders such as staff , creditors and other service providers. The process of business planning requires the business owner to identify stakeholders and to obtain their support ensuring the success of the business.
Business planning facilitates the setting of goals for employees , based on the overall business strategy and goals outlined in the planning process. This makes your people management tasks easier and enables you to perform and conduct meaningful performance appraisals that ensure your employees are motivated and committed. This will contribute to long term success.
Identify profitable niche's , business planning requires the business owner to look forward enabling savy entrepreneurs to identify profitable opportunities. This can't happen in an environment where the owners are making up the plot as they go. Instead of reacting to the business environment a business plan enables the owners and employees of a business to act proactively instead of reacting to developments as they occur.
There are many benefits to having a business plan in place and to successfully plan is to plan to be successful. For the Business Planning Process to provide relevant value it should be an annual task for the owners and managers of a business to conduct.