Writing a Business Plan: Why It Is Worth the Time and Effort

Are you thinking about applying to a bank for financing to support your business? If you haven't been to your manager yet, they won't know that the first thing they'll want to see is your business plan. You may not be convinced that you will need all the time and effort needed to prepare a plan. If so, here are the key benefits for  you and your business. 1. No matter how good your communication skills are, you cannot communicate your business vision and a perfectly crafted business plan. This will give you a clear understanding of what you are trying to achieve. This allows you to express your thoughts more clearly. 2. Too often business owners try to verbally sell their ideas, and after an interview with the bank, the manager turns out to be less wise than  at first. I think you can guess the result of many of these queries! three. A Business Plan will help convince both you and the Bank of the project’s feasibility and viability. There’s nothing like having all the facts in front of you to clarify the key issues 4. Theres no getting away from the fact that a business owner who plans ahead comes across as being more ambitious and more focused. A well prepared Business Plan demonstrates you have vision and that you know what you want 5. With numerous ideas floating around in your mind, the pitfalls or stumbling blocks to success are never that visible. The seething, thought-filled mind is seldom clear. A business plan forces you to put your ideas  in writing and in an orderly manner. As a result, you may go in a completely different direction from what you originally thought, or even give up on your idea entirely. An unpleasant idea, but which one do you prefer? Loss of  capital or  opportunity to reconsider ideas? 6. It is an ideal tool to monitor progress against the objectives you have set yourself (we will cover objective setting later). By checking progress against your Plan, you will be able to spot if you are moving away from your original vision and so you will know what has to be put right 7. Imagine if you didn’t have this check in place; an unnoticed change in direction or a slippage in achieving your objectives, if left uncorrected for too long, could be fatal to your business. On the other hand, it may transpire that a shift from your original vision could be a better alternative, but at least recognising this change allows you to adjust your course in a planned, structured and controlled manner 8. Every action you take has consequences, and a plan helps make those consequences  clearer. Recognizing the potential consequences of your chosen direction can help you  plan ahead, so you can better  cope with what the world of self-employment has to offer. This is something that "mental planning" cannot achieve. 9. Putting your thoughts down on paper makes you realize that your demand for a product or service needs more research. It may also highlight the need for further investigation of a competitor's product or service. With more research, you can avoid  potentially costly mistakes or  uncover  hidden benefits you may not have discovered before! 10. The plan will show you  how much money you will need to realize your idea. You may have a rough idea of ​​what to do, but  you may not realize that your equipment loan requires additional overdraft limits until you estimate your cash flow. Don't worry if it bothers you to comment on preparing your cash flow forecast. We'll show you exactly how to do it later in this book. 11. A business plan will help you with financing. One of the main reasons banks refuse to issue loans is the lack of information that can help them make an informed decision. If your manager doesn't have enough knowledge of your idea or business, you won't be comfortable enough to support you. Before he can say yes, he must understand your business. In the future, he may have to justify to his boss why he lent him money. So he needs as much information as possible to support his decision. A business plan would make him a lot more comfortable so he could say yes 12. By the time you have finished writing your Business Plan you will have a total understanding of your business; its strengths and weaknesses, the environment it operates in, what could potentially go wrong, and what you can do to ensure your success. Doing your planning on the back of an envelope is not going to achieve this You should realise by now that it’s essential to have a Business Plan; it could be the difference between success and that dreaded “f” word – failure! It’s all about understanding the importance of planning ahead. Spend time putting your thoughts on paper in a structured and logical manner. It will pay you dividends, both in getting the Bank to take you seriously and securing the future of your business.