What will happen if I don’t create a business plan?
80% of small businesses fail within the first 18 months. Forbes Magazine lists the following as the top 5 reasons for failure:
• Lack of understanding of customers.
• Lack of differentiation in the market.
• Failure to effectively communicate a value
• Uninformed decision-making.
• Unsuccessful business model.
Why do I need a business plan? How business planning drives profitable growth.
Many business owners assume that they only need a business plan to get a loan – and when required they approach them as an unwelcome chore. In reality the strategic planning process is a vital step to success for any business. It’s an invaluable opportunity to take control of your business and influence the future.
These are the top five reasons why you need one:
1. To make sure your business model is viable
Great ideas don’t necessarily lead to profitable businesses. Before you invest too heavily in your business you should thoroughly test your assumptions, talk to your target market and examine the cold hard facts to make sure your business model has the potential to be profitable.
2. To learn about your customers
The better you understand your customers, the more likely you are to give them something they’ll be willing to pay for. Identifying your target market, engaging with them and finding out what they really need allows you to identify a unique selling proposition (USP) that will successfully attract and retain customers.
3. To identify areas for improvement
Getting honest feedback from all your stakeholders, both internal and external, is one of the most valuable aspects of the business planning process. Examining your business from your customers’ point of view lets you fix mistakes before they cost you sales. Meanwhile, uncovering and resolving inefficiencies in your operations can deliver substantial cost and time savings.
4. To identify and evaluate opportunities
Exploring your competitive environment is another critical part of the business planning process. Finding out what your competitors are doing, and what customers like and dislike, lets you focus on business that will be genuinely profitable. Not every opportunity will strengthen your business model, and a customer-focused strategic plan lets you evaluate each prospect against clear long-term goals.
5. To secure finance or investment
If you want borrow money, attract investors or sell your business you will need to present your business plan. A thorough, realistic and fully integrated strategic plan will carry far more weight with potential lenders, investors or purchasers than a document produced just to meet their requirements.
Want to read more?
You can download our White Paper that explores in detail how to write a business plan that can boost your business, get you back in control and capture business value.
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