Anyone looking into starting a business or any endeavor that will consume time, resources, etc needs a business plan. If you are serious about business, taking planning seriously is critical to your success.
According to a recent study by Professor Andrew Burke, the founding Director of the Bettany Centre for Entrepreneurial Performance and Economics at Cranfield School of Management, He discovered that: “Businesses that write business plans and use them to manage their businesses grow 30% faster than businesses that don’t”.
Business plans here helps founders to break uncertainty down into meaningful bits i.e. you’ll be certain about sales projection, expense budget, milestones and tasks.
Here, business plan is focused on explaining what the new company is going to do, how it is going to accomplish its goals and most importantly – why the founders are the right people to do the job.
A start-up business plan also entails the amount of money needed to get the business off the ground, and amount that will get the business through initial growth phase.
Not all business plans are for startups. Existing businesses needs business plans to:
- Manage and steer the business
- Address changes in the market
- To take advantage of new opportunities
- To reinforce strategy and establish metrics
- To manage responsibilities and goals
- To track results, manage and plan cash flows and physical resources
- They use it to schedule for regular review and revision.
What You Should Know about Business Plans
- Business plans is not just a tool needed when just starting a business or when in need of a loan, it is vital for running a business (needed as market conditions change and new opportunities arise).
- Business plans should be printed on select occasions, to share with team members/outsiders but should be dynamic document that you maintain on computer because the plan goes on forever. (Printed version is like a snapshot of what the plans were on the day it was printed).
- If you need a formal business plan, then you include executive summary, company overview, some information about product/services, your marketing plan, list of company milestones, some information about team members, their roles, details of company’s financial plan – all these are called chapters/sections of a business plan.
- In all cases, the most important section of a business plan is the review schedule – it sites or acknowledges that it is the part of the business planning process, in which results and metrics will be reviewed and revised regularly.
- A real business plan is always wrong. Hence, the regular review and revisions (most times never done) is vital.
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