Why have a business plan
- Putting the idea and plan for the business on paper helps to paint a clear picture for you, potential investors and stakeholders in the business.
Depth of Understanding
- Creating a business plan forces deep thinking about the market and how the business will potentially fit into this market.
- A business plan should make the aims and objectives of a business clear and set out the time frames for achievement. This will give the business a better chance of remaining organised and on track and will help you to review the progress of the business more effectively.
- Many ideas sound good in discussion, however this often changes when detailed budgets and cash flow forecasts are drawn up.
- Financial forecasting will also help to give an indication of profit or loss and what happens if external factors change (sensitivity analysis).
- Once ideas and strategy have been written into the business plan, these can be used to track the progress and also be used to hold oneself accountable as the business moves forward.
- The business plan can be reviewed to see where expectation was exceeded and equally where expectation was not met. In doing so, the strategy can be amended and updated in the business plan.