I Am Starting My Own Business – Why Do I Need a Business Plan?

If you want to start a business then the words “Business Plan” will haunt your dreams for the next few months! If you have never produced any piece of writing more daunting than a postcard from Kos then the very thought of producing this all singing all dancing tome can make you feel sick! So sick in fact that you may decide you don’t really need one – after all you only want to open a little shop selling home made pate and gourmet pickles, or capitalise on your needlework skills and flog designer dog coats.
Sorry, you still need a plan and this is why……
Feasibility study – we all get too close to our own ideas and a business plan even in its most basic form acts as a feasibility study on any business idea. During the course of completing the plan you may find this idea just hasn’t got the legs to run, and equally, if you can’t finish a business plan you’ve got poor hopes of lasting the course once you start a business! Cruel but true.
Finds additional income streams – you may have had a brainstorm and come up with a fantastic idea but to realise the true potential of any business you need to explore all the possible ways it can generate income and the business plan allows you to do this.
Takes you from idea to opening day – if your great business idea is in its infancy starting on the business plan can show you how to help it grow up. A business plan can act as a blueprint from idea to opening and helps you identify the stages you need to go through before the first customer can come in through your newly open door.
Gives you the numbers – all start-ups need a budget and the business plan allows you to put a realistic number to that vital statistic. You can’t make any decisions until you know that number, and only the business plan can give it to your accurately.
Shows you who your competition is – A vital part of any business plan involves assessing the competition and finding fiendish ways to put your business ahead of them. This analysis can trigger strategies to bolster your marketing plan (yes, you need one of those too!) and identify parts of the market where your skill set can give you an edge. Equally it will show you if you are entering a super crowded market place where you haven’t a hope in hell of competing which is the business equivalent of swimming in a shark pool balancing a bucket of chicken on your head. It could save you much pain to run that analysis now!
These are just the most basic reasons for having a business plan! This is before we have even considered how a plan will influence any application for funds, how a plan will map out your growth and set the goals for the next few years and how a plan will impact on your professional development.
I’ll go into the nuts and bolts on these and other issues in further articles, along with a list of must have inclusions for a comprehensive business plan but for now all I can say is you really need one, get your head round the idea and be prepared to spend some time on it and complete it is stages if necessary, but complete it you must!
How do you eat an elephant? One mouthful at a time!

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