Benefits of Having a Business Plan
Starting a new business can be exciting, but as any business owner can tell you, it can also be risky. As markets change, businesses must adapt. The business planning process can be a valuable tool for anticipating and managing the risks associated with growth as well as economic downturns.
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Avoid Surprises by Scanning the Market
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Begin your business plan by scanning trends in the markets you serve. Who are your customers and how are their needs changing? What are your competitors doing to attract the same customers you hope to serve? Anticipating changing expectations of your customers helps you maintain your edge as a preferred resource and sustain customer loyalty.
Evaluate Your Readiness
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Continue by evaluating your current organization. Do you have the capacity to match the market demands? Are your people trained to meet customer needs efficiently and effectively? What maintains your customer loyalty and what can be done to improve it? An honest assessment of your organization's capabilities is a key to continuous improvement.
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Spell Out the Steps
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Create an intentional plan that lays out the steps required to develop your business based on your market scan and internal assessment. Share your plan with your team and coordinate efforts to develop the company into one that can thrive in the changing business environment.
Convince Bankers and Investors
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Summarize your research and plans in a written form to share with bankers and investors. Demonstrate you've done your homework about the market and your business capabilities, and that you've established a logical plan for responding to changes. Make it clear how investments are projected to pay off for everyone, and offer to keep them informed about your progress.
Compare Your Results
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The plan can also be used as a benchmark. Prepare periodic progress reports to monitor your business results with your forecasts and share the results with your staff and your banker or investors. The reports will either be a cause for celebration or they will stimulate modifications to the plan.
Building Commitment
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The greatest benefit of developing a business plan lies in the discipline of the process more than in creating the written document. Business owners who submit to the business planning process are forced to objectively critique their market position and organizational health. The discussions and research provide insights for managing business risks that cannot be obtained consistently through day-to-day operations. A business plan developed with input from the whole team creates commitment to achieve the plan as a team.
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