by Kelly K. O'Neil
It is easy for entrepreneurs and small business to convince themselves they don't need to do complex planning, strategy development, or a lot of writing of documents for their business. In my work with entrepreneurs and small businesses, I've never really been surprised by the number of people who don't have a business plan. I have, however, been surprised by the number of entrepreneurs and small business owners who actually think they don't need a business plan. In fact, 99% of small business owners don't have a plan. Without a business plan, they end up spending more time and money while making no significant progress toward their goals. So let's talk about the importance of a business plan so you can avoid sinking your own ship.
Why do you need a business plan? There are actually many reasons for taking the time to write a business plan. Here are some of the most critical reasons.
1. To Clarify Thinking. Writing a business plan gives you the opportunity to think carefully about your business, your strategy, your vision of success, and the steps, goals, financing, and marketing required to achieve success. Writing a business plan forces you to think in structured ways about how you will define your business, how you will compete in the marketplace, how you understand product or service offerings, and how you will market and sell the products or services you offer.
2. To Convince Yourself Starting and Growing a Successful Business is Possible. We all have reservations, doubts and questions when we start a new business. However, a high level of confidence in your business is crucial to your success. Writing a business plan, by forcing you to think through all aspects of business success, allows you to convince yourself the business can be successful. There is nothing like doing a revenue forecast and figuring out that you can actually achieve your financial goals.
3. To Understand Costs and Return on Investment. There are many costs (not all of them financial) associated with starting a business and taking it to the next level. It is easy to overlook or to underestimate some of these costs. Writing a business plan gives you the opportunity to understand and anticipate the costs you will have. It will also help you identify where to focus your efforts for the highest payoff activities.
4. To Create a Roadmap to Success. Your business plan is your roadmap to a place called "Success." Your business plan will state your understanding of what you have to offer, the competition within your market, product or service development strategies, financing, marketing, and your expectations of success. The business plan becomes the framework of your strategies future execution.
5. To Educate Your Team. My team and I work off our business plan. It allows us to clearly understand the vision of the business and to all be marching in the same direction. Additionally, when we bring on a new member of the team, it allows me to quickly train them on the bigger vision of the business to accelerate their success and mine.
6. To Arrange Strategic Alliances, Joint Ventures and Partnerships. Many businesses take great leaps as a result of strategic alliances and partnerships. Whether you convince a manufacturer to buy a particular component only from you or you develop alliances and partnerships that are mutually beneficial, partners must have some level of confidence in your viability before they will make a commitment. Your business plan is your argument.
7. To Expand your Business in Creative Ways. If you are looking to expand your business, for example, by bringing in people on a profit-sharing basis, your business plan demonstrates the vision and direction for your business at the moment and in the future. You cannot expect to bring in good people if you are perceived as directionless.
8. To Understand the Market. In order to write a compelling business plan, you must come to understand the market you wish to serve. You must understand what the people in the market buy, want, or need. You must have a strategy for informing the market of your product or service and showing people why your particular offering is the best. You must know if the market will buy your product or service, and at what price. Unfortunately this is a step many small businesses skip.
9. To Remain on Rrack. A good business plan will keep you on track. It will help you avoid distractions, evaluate opportunities, develop the right product, and differentiate yourself in the market. Your business plan will help you keep your focus and make smart decisions.
In short, a business plan is the document that sells others on your business, your excitement about your product or service, and your ability to be successful. Whether you view it primarily as an internal or personal document or as a public statement of your objectives and abilities, having a strong business plan is very important.
 Kelly K. O'Neil, Chief Strategy Officer, UpLevel Strategies, Inc.
Award Winning Strategic Coach and Marketing to the Affluent Expert Kelly O'Neil publishes the 'Arrive!' weekly ezine for small service businesses and information marketers. If you are ready to learn the best strategies to market to the affluent so that you can make more money and have more freedom and fun in your small business, get your FREE tips now at www.uplevelstrategies.com.
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