Many believe the business plan is an out-of-date document created mainly for the benefit of lenders, but I think it is much more than that. The most valuable part of business planning is not the formal document itself but the process we use to get there. The process makes you stop and think about every aspect of your business, provides clarity, and allows you to make informed decisions.
Like a builder uses a blueprint to ensure that a building will be structurally sound, the process of researching and writing a blueprint for your business – called a business plan – will determine whether your business will have a solid foundation. Without good planning, your business could collapse.
Think of it as the roadmap to get you to your destination, the place you call success.
Writing a business plan allows you to think things through, and it helps you develop a strong vision and goals to get there.
A good business plan offers many benefits. Your plan will question how valid your ideas, product, or services are; it will help you determine whether your business has a chance of making a good profit and convince investors and lenders to fund your business. It will provide an estimate of your start-up costs and how much you will need to invest or finance. The business plan provides a revenue estimate when you’re defining your market, who your target customers will be, and the percentage of the market you can expect to reach. Developing a marketing strategy will help you know how to reach customers from the start. Analyzing your competition will help you better understand your place in the marketplace. Your research will help you anticipate potential problems so you can solve them before they become disasters. The completed business plan is your tool to evaluate your business’ progress.
The process of being an entrepreneur is a very lifelong learning curve. Whether you are a Newcomer to Canada or born and raised in Canada, you are learning all the time; nobody ever enters entrepreneurship as a career option knowing everything about running a business. Things change in our local and global environment that we have to be aware of that affect our business. We have to constantly educate ourselves on our industry, markets, products, and personal development.
A good business plan will convince you that you’re doing the right thing – or not. Any experienced entrepreneur will tell you, the business you decided not to start because the financial projection did not meet your business goals can be more critical to your long-term success than the one you bet your economic future on.
As important as the business plan is, it is only one of the many components that ensure the success of your business. In the next issue, I’ll share insights into another vital component of entrepreneurship – mentorship.