Before we get into HOW to use your business plan, let’s see why you need one in the first place.
As an entrepreneur it can be tempting to jump into a new idea immediately and move full steam ahead to begin a new business venture. However, you have to walk before you can run! Diving into a project can result with a huge to-do list, and not enough time and this is when the chaos happens. This is why it is important to plan the business and think through all scenarios before startup. Not only is a business plan a blueprint for the startup of your company, it will provide an outline for the first few years and also give you an idea of if the idea is actually viable before you invest your time and money in it. Creating a business plan can be the deciding factor in your viability, success, and in securing financing.
Viability of Your Business
One of the most important steps in the business plan is writing the marketing analysis and competitive analysis segments. These will help you discover and visualize what your competition will be and establish what sets your company apart and gives you a competitive advantage in the market. This, combined with the financial projections, can be a huge clue to the likelihood of your startup’s success. These segments will tell you if the idea is not profitable enough or if it would take too much time and money to sustain, so you can cut losses early on and move to the next idea. Much better to find out early than to invest years and significant amounts of money into something that won’t work!
Success of Your Business
The process of writing a business plan forces you to think through exactly what you want your business to be – what products or services will be your core offering, what you hope to expand to over the years, and what voice to the customer and marketing methods you will use, to name a few. By first establishing feasibility, and then running through potential situations that may arise during the launch and growth of a business you are setting yourself up for success. Be proactive, not reactive! It can be the difference in success and failure.
Now – knowing all this, how can we use our plan to our benefit?
– Attract Investors & Lenders
So many businesses give up entirely on the concept of investors. “It’s too hard” or even “my business isn’t good enough”. Both of these may have an element of reality to them, but overall, no. There are risks and benefits in many aspects of business, but if you neglect to have a business plan, you’re not even trying to get investors to notice.
How to use a business plan regarding investments is by creating an executive statement that addresses the need that you are solving. Don’t obsess on numbers, or being unique, or even being the first in your market. Chances are, you’re not. But, you may very well provide what people need and that is what investors specialize in.
– Be Ready for Pressure
It’s incredible to see how minor tweaks made in how something is done can have a monumental impact on the result. Use your business plan to identify where things can be achieved at a better cost or more efficiently. It’s nearly impossible to address all potential possibilities without laying it out in a business plan.