Updated: May 8, 2020
In my last blog post I shared some handy tips and steps on figuring out whether your entrepreneurial business idea will work out in the long run. The great part about doing this research is that it now comes into play with your business plan.
If your business idea IS feasible, I want to shed some light on the next stage. Below are 10 reasons why your business plan is a must have.
1. Show that you’re serious about your business
Who will you be working with to create your business? Even if you are simply working for yourself and there are no employees, business partners or investors, a business plan shows that you are committed to building the business to its highest potential.
2. Install business goals
Why is the success of your business important? What goals have you set in place to reach within your business? Maybe a goal is to launch your website. Maybe it's to reach 100k in annual revenue. Maybe you simply want to make more difference in your clients day.
Goals are a great way to keep focused and make priorities clear. They help to keep you motivated - there will be days where you just have no interest in getting out of bed, but if you have something to be excited about, that will be enough to drag you out of bed. Goals boost morale!
One great 'goal' tool to utilise is the SMART method: specific, measurable, attainable, realistic, and timely. For your goals to be successful, you must be able to measure your progress. Be specific in what your goal is, be able to measure your progress, let the goal be achievable and relevant to your life purpose and give yourself a clearly defined timeframe. 3. Keep track of key numbers
How exactly is your business going to make money? Writing down metrics such as the number of current customers and business investments helps you to focus on solving challenges and assumptions associated with your business costs.
4. Determine your financial needs
Does your business need to raise capital (start up funds)? How much? Creating your business plan helps you to determine how much capital you need and what its being used on.
5. Gain the interest of possible investors
A formal business plan is the basis for pitching your financial proposal. It answers investors questions such as: Is there a need for this product/service? What is the financial forecast? What is your company's exit strategy?
6. What are the internal and external forces affecting your business?
There are so many personal and professional influences that can affect the way your business functions - what are the positive and what are the negative? Writing down and establishing what these influences are/could be helps to clarify your next move.
7. Define your marketing strategy and budget
There's an old saying, "To make money you have to spend money". This is definitely true in the wider sphere of marketing. However, you need to write down and clarify your budget for marketing per month. This stops the endless clickbait of possible marketing platforms which all offer great audience reach but can end up becoming an endless money pit.
Do your research on who can most help you most with reaching potential clients and set yourself a budget limit.
Bonus advice: The best marketing reach come from influencers, Google Ads & Facebook/Instagram sharing and sponsoring.
8. Map out the road to success and refocus
In times of doubt or confusion, your business plan has your back and helps you to refocus. Without that plan, you'll be at the mercy of ever-shifting short term strategies and memory blind spots to your long-term goals.
9. How will your business deal with changing conditions?
All of a sudden, you find yourself in difficult economic conditions. What are you going to do? How does your business keep running without falling into a state of disrepair? If your current business plan models aren't working, rewrite it to plan new ideas and strategies.
10. Estimate and calculate possible staffing needs
When you've finished writing your business plan, you might be surprised to find that you are suddenly left short-handed! With your business plan set in stone, you can now expand smoothly and confidently.
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An excellent business template and quick focus plan is provided by business.govt.nz - I suggest using these as they're pre-written and easy to fill out and understand.
Just remember - a business is not static. Sometimes we make the mistake of believing a business plan is a singular document that you put together when you're starting out and then don't look at again. In reality, your business plan will evolve over time as it develops and as objectives change. If and when you do shake up your business plan, make sure to keep your previous model in place as reference for why you made the change. It's very useful to look back on.
In the growth phase, re-evaluating your business plan will be useful for forecasting or finding further capital for business expansion. And further down the track, if you decide to sell your business, it will include strategies and timeline changes for the new owners.
Hoorah! You've written your business plan and now you're ready to make it all legitimate. Here comes the fun stuff - company and tax registration, permits, licenses, bank accounts, copyrights / trademarks, etc.
Stay excited folks!