A business plan is a document that outlines a company's goals and how it plans to achieve them. It acts as a roadmap for the future of the business and can be used to attract investors, secure funding, or simply guide day-to-day operations. A business plan provides stakeholders with an in-depth overview of the business, its objectives, and its growth plans.
A business plan can help you, and any potential investors or lenders.
But is a business plan actually necessary? While they can be helpful in some ways, you shouldn't feel bound to having one.
Many people will tell you that a business plan is vital when starting a business. And for some, maybe it is.
However, many people inflate the importance of a business plan. It's more than possible to start and run your business without one, and there are more valuable ways to spend your time.
A degree of planning is necessary, but rather than spending hours writing about what you're going to do, get out there and do it.
What works for one person won't have the same effect for another, so if you know that you won't recheck your plan once it's written, don't waste your time.
A business plan can be helpful for personal use; you can lay out where you want your business to go and how to get there. Setting out the individual steps can help you identify gaps in knowledge and provide a timeline of goals. This can be especially useful when starting a business, as it forces you to think through potential problems that may arise. Ultimately, there is no set answer when it comes to whether or not you need a business plan; it depends on your individual needs and the type of venture you're starting.
Business can be unpredictable, so you could end up feeling disheartened if the reality doesn't align with your original plans.
It's ultimately down to you if you want to write a business plan or if you don't think it would benefit you.
For the best of both worlds, we advise you to find a business plan template and draft a quick plan. Don't let it limit you or spend hours labouring over it.
Some lenders may ask to see a business plan so they can get a picture of how you plan to use your funds and repay the loan. However, this is less common than it once was as many understand the varying nature of business and can see that it can be limiting to stick to.
Instead of a traditional business plan, consider focusing on these elements that are essential to your success:
• Define your company's mission and values.
• Research your industry and competitors.
• Identify potential customers by analysing the market.
• Create a marketing strategy to reach them.
• Develop product, pricing, and distribution strategies.
• Create a team that can achieve your goals.
• Develop financial projections for the next three to five years.
• Prepare for contingencies by having a plan B in place.
These are all important elements of success and can help you chart a course to profitability without having to write out a full-fledged business plan.
Instead of spending the time on a business plan, you could use it to invest in other areas of your business.
Additionally, take the time to create relationships with potential partners who can help you reach your goals. Join trade associations and attend industry networking events. Finally, monitor changes in the market, adjust as needed, and stay flexible so that you can capitalise on new opportunities as they arise.
Many entrepreneurs find business plans too rigid for their needs. This is especially true if the business evolves quickly and adapts to changes in its market or industry.
Ultimately, it's up to you if you want to write and stick to a business plan.
If you genuinely think it would benefit you to lay out your financial projections and plans for the future - then, by all means, do it.
However, if you can't see how it would benefit you, then don't feel pressured into it.
If you decide not to have a formal business plan, there are still many benefits to having an overall strategy for your business. Outline the goals of your business and develop a method for tracking progress towards them. This can help keep you focused on achieving success.
Don't feel pressured to write a business plan if you feel it is a waste of time. Similarly, don't be stressed if you write one and stray from it. It's natural for things to change in business.
When discussing your enquiry, our account managers will ask what you plan to use your funds for and how you will repay - rather than requiring a full-on plan. Some of our lenders like to see a rationale for the business and the funds. If you already have one, we'll take a look; but if not, we won't demand one.
If you're looking for some extra funds to boost your business, enquire with us today and find out what you could borrow.
If you've decided that you want to go ahead with a business plan and want some assistance on what to include in it, visit our other blog post here: How to Write a Business Plan.
