Why do we have architects and engineers?
It’s simple really. Every great man-made structure, from history’s biggest wonders such as the pyramids of Giza and Angkor Wat, to today’s modern marvels such as the Burj Kalifa and Taipei 101 was only possible due to great planning and engineering. The same applies to businesses.
So what do you have to gain from taking the time to formulate your business plan?
For starters, a good business plan vastly increases your chances of success.
A good business plan allows you to see ahead, forecast potential problems and seize opportunities that come your way. It keeps you focused on your great ideas to keep your company on track to success. It keeps everyone in your company, from your lowest ranks to your top managers all working on the same page towards a singular objective. It gives your business proper structure, and a great foundation to stand on even on the toughest of times.
When it comes to making decisions, your business plan will be like a manual of sorts that prevents you from making random decisions. It keeps everything in perspective so that everything you do will have a purpose. It saves you from making bad decisions, saving you time, effort and money allowing you maximize your profits.
Every business owner dreams of growing their business and expanding to new markets and opportunities. Down the road, your business plan will be your roadmap to steady growth. It will let you spot opportunities and allow you to act accordingly. Even when an opportunity seems to present itself randomly, your business plan will at the very least give you an idea how to best proceed.
In today’s global market, competition has never been fiercer.
Attack Your Market
Your business plan will be your primary weapon to attack your market and give you an advantage over your competition. Likewise, your business plan will also act as your shield, allowing you to defend your position by giving you an idea about your competition and what they are doing.
When the going gets rough, your business plan will allow you to sail through even the toughest of times. A good business plan will include forecasts and worst-case scenarios allowing you to entrench yourself into a position that would let your business survive where others may fail. It will allow you to save up enough capital to keep your business running even through rough patches.
A business plan is also essential if you plan on securing investment to fuel the growth of your business. Your potential investors will be looking into your plan to see if your business will be viable and profitable for them to support. It will be very tough or even impossible for you to sell the idea of your business to your partners without a proper business plan to back it up.
I know someone who is really a genius at coming up with great business ideas. Often times, his ideas when it comes to technology are years ahead of time. However, he doesn’t appreciate the benefits of proper business planning. He starts various businesses based on his ideas and ends up barely breaking even simply because he isn’t able to foresee and act properly on hurdles that come his way.
Without a business plan, he can only react to challenges and opportunities that come his way and he finds it very hard to maintain his focus. Because he cannot maintain his focus, he ends up jumping from one idea to the next, only to see his previous ideas becoming very profitable for someone else a few years down the road.
He isn’t alone.
A lot of entrepreneurs start out with a great idea, only to find themselves fail due to the lack of or poor planning. Creating a good business plan can take a lot of time and effort. For some, the allure of getting on with their business is just too exciting to wait and work on the paperwork required to come up with a proper plan. Without the foresight brought about by good planning, they are essentially entering gambling on their success.
Are you ready to gamble on your business by going through it without a plan? I would think not.