Five reasons your small business needs a business plan
Updated: Apr 7, 2021
I've lost count of the number of solopreneurs and small business owners who had launched their business and did not have a business plan.
Over the course of my career, and possibly a lot to do with my project management background, having a plan to start a business just became the assumption.
It never occurred to me that someone would start a business without a business plan.
I've attended many network events, training sessions and seminars and it baffled me how many small business owners I chatted to didn't have a business plan in place when they launched their business.
Be the third pig
In case the reference confuses you, the third pig built his house of bricks. Presumably on a foundation.
Your business plan is the foundation on which every other activity you undertake in your business is accountable to and established from.
Whilst a lot of people poop themselves at the thought of putting together a business plan, it really is not as scary as you may be telling yourself.
Not just for businesses seeking financial support
Many people believe that a business plan is only necessary if you are going to apply for a business loan, or seek investment/funding.
This is true to a degree. if you are looking for financial support, you WILL have to put together a business plan, there's simply no way around it. And these typically have to be quite in-depth in their detail because you are essentially trying to convince banks or investors that you have a viable business idea that they should be backing.
For smaller businesses, or where you are not looking to get funding or take a loan, a business plan is still highly recommended.
Putting together, even a simple business plan will provide many benefits and clarity for you, including:
Provide focus - probably the main purpose of a business plan is to put in place a plan of action, including milestones for your business. These milestones, or goals, will provide the focus your business will need to ensure you reach each milestone. As an additional step, you could write detailed actions you will need to take to accomplish each of the milestones.
Starting a business, and specifically, making a success of your business will take work. A LOT of work. Especially if, like me, you started your business under less than ideal circumstance with regards to finances available.
By creating a business plan, and having those milestones to work towards, you can prioritise your time and efforts.
I have met many new business owners, who during the start-up phase were spending their time and energy all over the place. Like a headless chicken. Not really understanding why they were doing what they were doing.
You're going to be busy enough, make sure you're working towards a goal!
Manage change - with even a basic business plan in place, you are able to track your business progress against the plan on a monthly basis and manage any change that is necessary. When you initially create a business plan, much of it will consist of assumptions. For example, how many paying clients you will have in month 3. If the reality is that in month 3 you have had fewer, or indeed, more paying clients, you can then amend the business plan accordingly.
Being ahead of your forecasted milestone means you may be able to shift your focus onto the next milestone and putting more time and effort into that.
Being behind your forecasted milestone will undoubtedly mean you will need to rework the future months of your business plan to reflect this. Again, by doing this you will know where your time and energy needs to be spent to get your business plan projection back on track.
Accountability - having milestones in your business plan develops accountability. Always set realistic milestones so that you are not constantly failing to meet the milestones as this can in many situations, lead to self-doubt, and worse, imposter syndrome.
So rather than setting a goal of having 10 paying clients in month one (and depending on your business this may actually be achievable) start with a number you feel is realistic and achievable. Remember, if you do better than your milestone goal, that's a positive thing. If you set your goal too high and don't achieve it, besides the possibility of being demotivating, you will also need to rework your entire business plan timeline to reflect this.
Secure funding or investment - as mentioned previously, if you will be seeking a loan or investment/funding for your startup, you will DEFINITELY require a sound and comprehensive business plan. The more funds you're hoping to raise, the more comprehensive your business plan will need to be.
If like me, you are not seeking funding, then your business plan can be much leaner.
Clarity on your business value - whether your business offers physical products or services, you need to identify the value that you bring to anyone who purchases it. I'm sure you believe that everyone in the world requires your service or product, but unless you can 'sell it' to your audience, even the best products or services in the world will get zero traction.
Working through the business plan will encourage you to really think about what value your product or service brings, allowing you to more clearly identify your ideal client, which in turn leads to identifying where your ideal client is likely to be hanging out (which social media platform for example).
Understanding your value proposition from an early stage in your business planning will set the strategic marketing plan for the entire startup phase.
Need help?
Never put together a business plan before? Overwhelmed with everything you need to do to get your business launched?
Why not book a free 15-minute discovery call with me in which we will discuss where you are with your business and how I may be able to assist you to streamline your efforts of getting your business online and getting those first paying customers!
I am currently working on a template business plan which I will make available soon. If you would like this or would like further business and social media tips, please sign up to my newsletter
Any questions, please do comment below and I'll do my best to answer and assist in any way that I can.
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