Business Tools: The Business Plan

What Use is a Business Plan?

Most would have heard the saying ‘Business owners do not plan to fail, they merely fail to plan’. Business studies show that business owners that plan are far more likely to prosper and survive than those business owners that do not. In fact successful entrepreneurs have singled out business plans as the most important aspect of their success.

 A business plan is not just relevant for new businesses but for existing businesses also. For new businesses it will assist in determining the feasibility of the proposal. For an existing business it will improve performance by comparing actual outcomes against projections.

Key Benefits

  • Attracting External Funding – For both new and existing businesses the primary reason for a business plan is to attract outside funding. Most lenders see a good business plan as a pre-requisite to lending, as it is part of their due diligence process.
  • Strategic Analysis – Creating a business plan should act as a catalyst for the key drivers of the business to sit down and strategically plan where their money will be spent and for what gain.
  • Company Direction – A business plan provides direction through the setting of high level company goals. These are then broken down into specific schedules and actions for the various members of the business.

The key areas covered in the business plan are very similar for both new and existing businesses, these may include: customers, competitors, marketing, operations, financial targets, goals, your people and more. The major difference is that new businesses will have no financial records and can therefore only provide educated guesses on their expected financial performance.

Business planning is not a guarantee to success but with guidance of a business consultant, it will certainly help you understand, plan and evaluate the key steps in the decision making process and help build a better business.

Richard Kemp – Watts Price Accountants

The advice provided on this Article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs.