There are a variety of reasons, which are briefly explained on this webpage.
In the business plan, you set your goals (your destination), you set out the actions you must take to reach the destination (the route map) and you set out the resources required (the fuel) to successfully follow the route to the destination.
First, it’s down to you to set out your goals – what you hope to achieve with or obtain from your business. For most that will be a level of profitability, but if you leave it at that you are missing out on one massive advantage that you can give yourself – a truly high level of motivation.
If, instead of defining the level of profit you require, if you set out your reasons for requiring that profit, that is far more motivating than simply setting an amount of profit as your goal. Your reasons are your “wants” and, when the going gets tough, as it surely will at some point, those “wants” will be far more motivating than targeting only a level of profitability. Only you can define your “wants”, which you should do now, before considering other aspects of your business plan, so that you can then laser in on the route and resources to get them.
In the “published” business plan, the “wants” need not be included. Instead, you compute the financial resources you need to achieve and maintain them and that becomes the profit goal of the business plan.
You compute the financial resources you need to achieve and maintain your “wants”, which becomes the profit goal of your business plan.
Next, you should plan the way in which your business will reach that profit goal – the nature of the business, the contribution to profits provided by its products or services, its overhead expenses and, consequently, the level of sales or turnover required to achieve the profit goal.
Finally, you must identify the resources required – usually capital and people – to produce the turnover and carry out the related business activities.
Put all of that together in a logical and professional manner and you have a business plan.
How do you know your business is on track if you have nothing to measure your results against?
Putting it bluntly, you don’t!
By comparing results to your business plan, you know:
whether you are on schedule to achieve your goals – whether profit is being produced at the anticipated level and rate and
if not, you can identify the variances and take steps to remedy them.
That makes you business plan and important tool for management and control of your business.
Whether you’re raising a loan or investment from a private investor or a loan from a bank or other financial institution, you will need to be able to demonstrate that the investment is sound, you are able to meet the cost of servicing the funding – i.e. interest – and repay the funds at the agreed time. A properly structured business plan, providing the financial information, supported by the plan to produce the forecast results, is absolutely essential.
Not only that.
A professionally produced business plan, providing the information required by the investor or lender, reflects on you and your approach to the business. You’ve probably seen it on “Dragons Den”. The presenters of the opportunities are really keen about the product itself and the way they can get it into major retail outlets but, when questioned on the financials and how they will achieve that, they are at a loss. Ultimately, they don’t get the investment they are looking for. If your plan is “on the back of an envelope” and you are not clear about how you will deliver the results you present, neither will you.
Conversely, if you produce a detailed plan, showing exactly how you intend delivering the results, you demonstrate to investors or lenders that you have properly prepared yourself. Their confidence in you escalates exponentially.
You cannot be expected to have the knowledge or experience to create the essential, professional business plan, providing all of the information that an investor or lender will need, which is where we come in.
We can prepare a professional looking plan for your business, presented in the way and containing all the information that investors or lenders understand, need and expect. With a business plan prepared by us, showing you and your business in the very best light, raising capital for your business becomes so much easier and more certain.
Whether you need the business plan that you absolutely must have for management and controlling your business or whether it’s for presentation to potential investors or lenders, why not contact us, now? We will provide you with the perfect plan for your business – and relieve you of the stress that you would otherwise be bound to suffer, if preparing the plan yourself, when you do not have the knowledge or experience required.