FREE online courses on Business Plan Basics - Why is a Business Plan
Important
The Success of your business depends largely upon the
decisions you make. A business plan allocates resources and measures the results
of your actions, helping you set realistic goals and make decisions.
You may have asked yourself, Why should I spend my time and
energy drawing up a business plan? Remember, first and foremost that lack of
planning leaves you poorly equipped to anticipate future decisions and actions
you must make or take to run your business Successfully. On the other hand, a
sound plan can act as:
A reality check. The process of putting a business
plan together, including the thought you put in before you begin to write it,
forces you to take an objective, critical, unemotional look at your business
project in its entirety.
A performance tool. Your written business plan is an
operating tool which, when properly used, will help you manage your business and
work effectively towards its Success. Your business plan will allow you to set
realistic goals and objectives for your company's performance, and, if
maintained, will also provide a basis for evaluating and controlling the
company's performance in the future.
A message sender. The completed business plan
communicates your company's ideas and message to employees, outside directors,
lenders, and potential investors. outside your company. A business plan helps
you do that in an organized, credible manner. Also, the process of planning
helps you determine if your vision is realistic, and tells you what you need to
do in order to achieve it.
A motivation tool. The development of your business
plan is one of the best ways for you to communicate how well you understand your
business and describe your vision of your business. Without proper planning, it
becomes impossible for you to get all of your employees reading off the same
page of the book and generating energy through high levels of team work. It is
impossible to motivate people when they do not know where they are going or what
they are trying to achieve.
A management development tool. Putting together your
business plan will help you develop as a manager because it can give you
practice in thinking and figuring out problems about competitive conditions,
promotional opportunities, and situations that are or may be beneficial or
harmful to your business.
A road map. Your business plan, once it is completed,
will give you and your employees goals and direction: a roadmap to follow in
guiding your business through good and bad times.
