Here Are 5 Powerful Things A Business Plan Will Do For You and Your Business

business is not a hobby or playful adventure. As an important
venture that requires an investment of time, effort and money,
entrepreneurs just have to take business planning very seriously.
One thing is clear: planning is a habit of ALL successful businesses
that still exist today!
#1   A Business Plan is a Strong Commitment
“It pays to plan ahead. It wasn't raining when Noah
built the ark.”
- Peter F Drucker -
According to data from the Panel Study of Entrepreneurial
Dynamics, which involved a survey of more than 800 people in the
process of starting businesses, writing a plan greatly increases the
chances that a person would actually go into business.
Entrepreneurs who have the discipline to prepare a business plan
are two and a half times more likely to get into business.
That's powerful!
Writing a business plan helps you to focus and fight
procrastination. Investing time and effort in researching your target
market, analyzing your competitors and estimating profit figures is
bound to increase your interest in bringing your business idea to
life.
A business plan has the power to positively affect your mindset.
When an idea is left undeveloped, it starts to lose significance. As
you gather information about your business, you start to develop a
strong level of confidence and ‘can-do’ spirit around your business
idea. You will experience less fear and see more possibilities in
your idea.
Whether you plan to start a business from scratch or want to
expand an already established business, a plan will keep you
interested, focused, committed and determined to take action.
#2   A Business Plan Helps To Develop Your Idea
“Planning is bringing the future into the present so
that you can do something about it now.”
- Alan Lakein -
When you first have an idea, it exists as a cloud of thought in your
mind. The problem with thoughts is if you don't write them down,
you may forget or never remember them entirely. So you decide to
write down your brilliant business idea on a piece of paper (or in
MSWord on your laptop). Yes, finally, it can never be lost or
forgotten!
The problem is, what you have written is just an idea, and it's not
the same thing as a real life business. To become a real business,
certain actions and investments of time, effort and money must
happen to transform your beautiful idea into a successful
business.
How will you start? How much will you need and who will you get it
from? What kind of customers will you target? Who is your
competition and what will you do protect your business from
them? Are there any licenses, permits or government approvals
you need before you start? Who will be responsible for what?
All of these are important questions that must be answered in
order to transform your idea into a real business.
A business plan allows you to see your business from the top and
understand how all the elements will fit into one another. The most
important thing that every plan does is to bring your attention to
gaps and holes you may have missed because they didn't seem
very apparent in the beginning. In fact, business plans often bring
up interesting and creative alternatives that could make your
original idea much better and powerful.
#3   A Business Plan Makes You Prepared And More
Likely To Succeed
“To be prepared is half the victory.”
- Miguel de Cervantes Saavedra -
I just love Toyota because it's definitely one the most successful
car brands in the world. Year after year, it continues to release the
most beautiful and reliable 'driving machines' my eyes have ever
seen!
Like most car manufacturers, Toyota invests a lot of time, effort
and money in the early stages of developing every new car model.
A couple of years before the new model is released, Toyota's
engineers and specialists brainstorm tirelessly on different aspects
of the new car model, especially in the areas of comfort, safety,
speed, control and beauty.
Why doesn't Toyota just go ahead and build the car? After all, it
has a top team of highly talented and experienced designers,
engineers and technicians. With all its talent and experience, why
does Toyota still spend all that time, effort and money in planning?
Toyota is serious about planning because it knows planning is
always required for success. It knows planning is critical to build
cars that people will love and be happy to buy. It invests in
planning at the early stages because it knows that’s the best way
to build something that will beat the competition. And guess what,
it always works!
Toyota is always prepared; that's why it always succeeds!
Abraham Lincoln, one of the greatest presidents of America that
ever lived, once said: “Give me six hours to chop down a tree and I
will spend the first four sharpening the axe”
What does this tell you about planning? Unless you plan to waste
time and suffer the emotional trauma of mistakes, investing in
planning usually leads to better preparedness, fewer surprises and
a higher likelihood for success.
#4   A Business Plan Keeps You and Your Business
Accountable
“Proper planning prevents poor performance.”
- Charlie Batch -
You are very likely to be the biggest risk to your business. Yes,
you! Because you're answerable to no one in your business,
there's usually that temptation to take the business for granted.
It's your idea and your business. Everybody answers to you
because you're the boss almighty. But who do you answer to?
Unlike your employees who can be fired, there's no punishment
and nothing to hold you accountable if you procrastinate, backslide
or fail to meet targets and deadlines.
A business plan allows you to set goals and track your progress
and levels of achievement over time. Without this accountability,
your business will always be subject to guesses and impulsive
actions and will definitely perform below its best potentials.
People who set Specific , Measurable and Time-bound (SMT)
targets for themselves usually perform much better than others. If
I plan to lose 5 kilograms (11 pounds) of weight in one week, that's
an SMT target.
If I start on Sunday and by Wednesday, I notice I've lost only one
kilogram, I would be moved to increase my efforts because I know
it would be impossible to achieve my target if I continued at my
current pace. Because I know my target is time-bound (1 week),
there will be more urgency in my attitude to meet this target. And
when I meet my targets, I make progress; which is exactly the
result I want!
A business plan is the only way I know for entrepreneurs and
businesses to hold themselves accountable using Specific,
Measurable and Time-bound targets. It's the best way to eliminate
procrastination, reduce the fear of failure and inspire yourself to
take quick and bold actions that will make your dream business
come true!
#5   A Business Plan Increases Your Chances of
Raising Capital
“Good fortune is what happens when opportunity
meets with planning.”
- Thomas Edison -
Nobody can read your mind. This includes potential business
partners, bank loan officers, investors and other people who can
provide the capital you need to start or expand your business. How
can you bring out that brilliant business idea from your mind and
present it to these people in a way that convinces them to invest in
and support your business?
Well, there’s an easy option. Why don’t you just open your mouth
and tell them the whole story. Hahaha! Most people who try this
will surely end up confused and stammering.
Why put yourself through this trouble when you can have a
business plan do all the talking for you?
A plan is the most effective way to communicate your business
idea to other people in a clear, complete and convincing manner.
It's no longer that odd idea you had in your head. It's now on
paper. It's concrete proof to anyone who sees it! Partners,
investors and bankers are more likely to take you seriously if you
have a well-written and professional business plan.
Banks and investors actually take business plans very seriously.
Why? Because the information it provides helps them to properly
measure the risk of investing in your business. Banks and
investors take calculated risks; they're not gamblers. It's highly
unlikely that they will give you their money and hope that your
business is successful and turns a profit.
Anybody who's interested in your business idea wants to see that
you have taken the time to do a proper and detailed planning. They
want to see your Profit Forecasts. They are interested in your
Competitive Analysis and the quality of experience you have to
successfully run the business. The more information they have, the
more convincing your business dream becomes to them.
Whether you're applying for a bank loan, looking for a partner or
venture capitalist to invest in your business, applying for a
government loan or grant, or entering for a fundraising
competition, you stand a better chance of winning and raising the
capital you need if you have a well-written and professional looking
business plan.