Business and Plan. As an entrepreneur, how do you feel about those two words? For some, you might think “Great! Love a plan!”, and dive straight into it. For others, it might mean time spent on Google, trawling through the many templates that are out there. Then, there are those for whom those two words represent confusion and fear; and those who simply don’t think it’s a relevant subject for them. But here’s a newsflash – there are many reasons why you need a business plan. And we ALL need one in some form.
What’s in a business plan?
Before we get into the reasons why we need a business plan, let’s think about what they contain. There are a number of key sections that should be included:
- Goals – for the next 1, 3 and 5 years
- Customers – who are they, what do they want/need and what would convince them to buy from you?
- Resources – what do you need in order to deliver?
- Competition – who else is working in your space, and what can you learn from them?
- Sales and marketing – how are you going to reach your customers?
- Finance – how are you going to finance your business, and what is your expected return?
If you’re planning on launching the ‘next big thing’, then thinking about these topics probably makes sense. Especially if you are considering looking for external funding. However, if you’re only planning to set up a ‘hobbyist’ business, then you may think that the above sounds rather like overkill.
But regardless of the level and scope of your ambitions, we all need a business plan. The key though, is writing your plan in a way that works for you.
5 reasons why you need a business plan
Taking into account the fact that your business plan needs to work for you (and your business!), why do you actually need one? Here are five common reasons why you should up your business planning game:
1. To know where you’re going
A business plan is like a map, or a set of directions. It tells us where we’re going, why, and whether you have any stops on the way.
2. To make sure have enough money to get you there
Whereas point 1 is about where you’re going and the journey you want to take, point 2 is about making sure you can afford the trip. It might be that you have enough cash for the journey, but if not, you might need to get some from elsewhere.
3. To know what provisions you need for the journey
Once we know where we’re going and that we have enough money to get us there, we need to think about the things that we need along the way. This might be practical tools and resources, equally, it might be provisions to sustain us, the travelers.
4. To know what you might find at the end
This is about the pot of gold at the end of the rainbow, basically! How do you know how much gold you might find? And is it enough to make the journey worthwhile?
5. To consider other people who are on the same journey, and why
Point 4 is about considering your broader environment. Is there room for others on this entrepreneurial journey of yours? And if so, what can you do to either get their first, or at the very least, make sure you get the share of the gold that you’re looking for?
And the key to it all…
Explained as it has been above, it becomes clear that the reasons why you need a business plan actually do apply to every business. Every business owner, regardless of their definition of success and the scope of their ambitions, is on a journey. And every journey requires navigation. So while you may not need a full-on competitor analysis if you’re only planning a side-hustle, you still need an awareness of who is offering a similar thing to you.
The question, therefore, isn’t whether or not you should have a business plan. It’s what your business plan should look like. And the key, therefore, is producing a business plan that works for you. One that is useful, appropriate for your business, and contains what you need it to contain so that it can support you on your entrepreneurship journey.
If you don’t have a business plan, and aren’t sure where to start, let’s talk! We can write plans for you, or support you to produce one yourself. Our business coaching clients even get a free template as part of their programme.
Without a plan, even the most brilliant business can get lost.
Yogi Berra