The Importance of a Business Plan

Jun 20, 2022 · 2 mins read
The Importance of a Business Plan
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Let’s begin from here. For us to gain a good understanding of what a business plan is, let’s first look at what’s not a business plan. A business strategy isn’t something you draft once and then forget about. It doesn’t even have to be a document; it just means you know what you want to do in the long run, rather than what you think you need to do right now. However, it’s not just words on paper.

Business plans are not only for loan applications, new businesses, or students in business school. A business plan really doesn’t have to follow all the known procedures and formulas that you know. With this understanding, let’s talk about what a business plan is.

A business plan is a document that lays out your business goals and how you intend to achieve them. A business plan lives and breathes, can change and be flexible. In its simplest form, a business plan is a guide that outlines goals for your business and how you intend to achieve them. It provides an overview of your business strategy, milestones to track tasks and responsibilities, and the basic financial projections you need to forecast your cost of sales and cash flow.

A pretty standard or traditional business plan will typically include: an executive summary, products and services, a market analysis summary, a strategy and implementation summary, a company and management summary, a financial plan and the appendix for a detailed business plan outline Before you begin developing your business strategy, examine the following questions:

First, how long should your plan be?

You can make your business plan as long or as short as you want. It only needs to explain your objectives and be flexible enough to change when new data becomes available. You can make it as lengthy as a dozen pages or as short as one page. However, communicating your vision and ambitions is usually best accomplished through shorter, more concise plans.

Next, who is a business plan for?

A business plan is intended for anyone who needs to view it. It could be an internal document that you show to workers, co-founders, and others to help them grasp the vision and comprehend your strategy. It can also be used externally to demonstrate to potential investors, future employees, or potential partners what you intend to do, why you intend to do it, and how you intend to succeed. Your business plan should be dynamic.

When done with the business plan, you should update it as new plans become available. In fact, when businesses track their performance against the plan, they are able to grow by up to 25% of their performance. The process of creating a business plan is more significant than the plan itself. Planning should take place all year, not just once a year. Strategic planning questions should be asked and answered as often as new information becomes available.

The leader’s job is to build a rhythm of learning in their organization and instill discipline that pushes you to work challenging your decisions.

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