Do I really need a business plan?
When helping people set up a new business we often get asked “Do I really need a business plan?” and we get comments like “I know what I want to do so I just want to get on with it” so, does it really matter?
The first thing to consider is what is a business plan? Put simply, a business plan is simply a way of committing to paper, the goals of your business, why you think you are going to achieve them and how you are going to do it. It may also provide information about the business itself for example who is involved, what you are selling/ service you are providing and how your business will operate.
It’s the sat nav for your business…
A business plan provides you with a road map to achieving the goals you have set yourself for your business. It will also, if followed and updated, provide you with a focus on what needs to be done and when by making you think carefully about the various different aspects of your business.
Why do you need a business plan?
There are a variety of reasons for this and often new business owners complete one because they feel that they should, The reality is that unless you are going to use it and keep it updated there is little point. Although the process of actually sitting down and writing about your business can help clarify any thoughts and concerns you may have and give you clarity about what needs to be done.
It doesn’t need to be a long document…
Some of the best business plans we have worked on have been one been one-page long, using the headings what am I going to do, how am I going to do it and when am I going to do it by?
Of course you may need a more in depth document if your business is going to be larger or you are looking to raise finance. The lender will almost certainly want to see a business plan so that they can assess where their money is going and that you are going to be able to repay them. If you are looking for an investor, they will want to read the plan with a view to assessing the likely return on their investment and how they are going to get their money back.
When writing your plan it is always worth bearing in mind who will be reading it, if it is just for you, the language you use will be different if you are looking to raise money form the bank.
Click here for an example business plan template to get you started.