Some people believe that business plans are merely guesses made about the future of a business that we know little or nothing about. However, statistics indicate that businesses, activities, and even individual actions have a better chance of succeeding if they start out with a plan.
Each business should have a starting point and a destination through its journey, putting in mind that even the best planned route may require some changes regularly. A business plan is the itinerary.
So let’s start out with the basics and work our way from there.
First of all, what is a Business Plan?
A business plan is a document that includes details about the product/service, all the business objectives, milestones, individual responsibilities, dates and deadlines, and budgets to achieve the business’s goals in terms of growth and profit.
A business plan is extremely important for every business whether it’s new or old. It assists the business owner to take informed decisions and paves the way to success while providing interested parties with insights about all aspects of the business. A business plan should include information such as:
A detailed description of the product or service,
Financial projections or forecasts for the next three to five years,
Detailed information about employees, processes, materials, and tools,
and a market study covering customer perceptions and preference, competitors’ analysis, threats and opportunities…etc.
Why do we need a Business Plan?
Many businesses have shut down because they have jumped directly to starting up their operations without having a proper business plan. Having a business plan is crucial for every business whether they are big or small, new or old. It ensures that business owners do not spend money, time, or resources unnecessarily on businesses or projects by initially checking their viability.
As aforementioned, a business plan is not just for startup businesses, it can also be used by existing businesses. An existing business should update its business plan regularly to increase growth and benefit from anticipated opportunities in the market. Since the only constant in life is change, markets inevitably change as well. Therefore, it is important to have a robust business plan and conduct regularly management meetings to adjust it according to market needs.
What does a Business Plan include?
At a minimum, a Business Plan should include the following:
A Business Plan can provide numerous benefits to a business. These benefits can be summarized as follows:
A Business Plan helps business owners to remain focused on business goals, objectives, issues, and opportunities along with resources.
It permits business owners to be more adaptive to the market in which they operate as it forces them to research and analyze industry trends, identify current and future challenges, weight competitors, and understand where their business stands in the market.
Regularly updating a Business Plan allows a business to become more efficient by eliminating non-value-adding processes.
A Business Plan is also crucial to estimate the amount of capital or funds needed to start the business and where the money will be allocated.
Finally, a Business Plan ultimately helps mitigate risks of failure.
Is a Feasibility Study the same as a Business Plan?
Although a Business Plan might be mistakenly confused with a Feasibility Study, there are subtle differences between the two.
The following table explains the main difference between a Feasibility Study and a Business Plan:
It is created after the success of a Feasibility Study.
It is established first to find the workability & profitability of a business.
More of tactics and strategies.
More of calculations, analysis and estimations.
Deals with growth plan and sustainability of a business.
Deals with viability of a business.
For more help on developing your Business Plan for your next big venture, feel free to contact us at any time.