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10 reasons you need a business plan

As you can imagine, one of the biggest killers of business is insufficient planning. It’s an exciting time when you’re beginning your new venture, so sometimes your planning can fall by the wayside. We get it, and even the most successful titans of industry can remember times they overlooked the importance of setting out their intentions. Honestly, if you don’t plan you’re going to become unstuck pretty quickly. You need to make your plan – there’s no two ways about it.

Your plan must represent you. Creating it will take you time and thought, and that’s a good thing. Nail what you’ve set out to do in the introduction so you hold the attention of the reader or audience you’re targeting, and think about how you can make it more interactive. Your plan MUST include these things to be successful:

  1. your intentions laid out clearly
  2. market opportunity/industry analysis
  3. your operational plan
  4. detailed forecasting and scenario planning

Let’s look at why you really need one at all, here are 10 reasons why…

1. Understand your market

This is a crucial part of starting a business. There’s no sense in starting the next Google or Facebook when the existing platforms are such dominating forces in their market. Look at what’s already out there so you can carve your niche effectively. Without doing thorough research into the market, you could inadvertently plagiarise an existing product, make something that’s sub-par next to existing products, and ultimately fail. This is – or at least should be – rule one of business. You won’t get far without recognising where you will stand in your industry.

Understanding who your competitors are is crucial to your success, as you can learn from their past mistakes, and eventually take over the market. Without proper research, you’ll fall flat.

2. Know your message

You need a strong sense of your brand when you’re getting going. Planning your message before you start the proverbial ball rolling you’ll find you have a far more set route to follow. This is invaluable when you’re having those days when everything seems to be going wrong. How will you attract customers if you, the owner, aren’t even sure what your business stands for?

Knowing exactly what your business is all about is going to allow you to create a realistic plan for the coming years, too. Lacking a sense of identity will result in you lacking direction. Besides, learning to speak confidently and concisely about your business will always be beneficial, no matter what stage you’re at.

3. Clarity & focus

Similar to knowing your message, you need 100% clarity in what you’re aiming to do. Set yourself a handful of achievable targets, and work towards them, resetting as you go. Making smaller goals not only gives you a nice sense of achievement, but will motivate you further to accomplish bigger things.

Writing your business plan is going to make you think more clearly about what you’re doing, and where you want to be in the future. However, because your business is constantly changing and evolving, remember that your plan will be out of date pretty soon after its creation. Keep it updated and follow the important points.

Starting up a business is going to stretch your brain in ways you never knew was even possible. It’s going to be a hard slog to get everything right, but also to keep your mind on track. Your business plan is your ‘road map’, so needs to be checked regularly so you don’t lose sight of where you want to be. Using a forecast with it (NOT instead of it!), means you’re also using a sat nav. Use your plan to see how to get there, and use your forecast to dodge real-time obstacles on your way.

4. Risk reduction

Even if your business successfully navigates the ongoing battle of a public relations crisis, the effects it can have on your business’ online search results can haunt you for years. To help mitigate future problems, it’s important to prepare. Christian Hamilton, a Reputation Specialist from ReputationManagement.com suggests developing an actionable crisis management plan before a crisis strikes. Having a crisis management plan reduces the possibility of negative content ranking in your top search results long-term. In this infographic, ReputationManagement.com explores 4 steps you can take that will form the foundation of a crisis response plan for yourself or your business.

5. Loan applications

You’re going to get to a point eventually where you really need a cash injection. This could come at any point while you’re operating, so keeping an up to date plan will come in handy for sure. Any investor you come across would be turned off your company if you don’t have a solid plan that you’ve stuck to, or at least updated to match your new direction.

6. Attract employees and a management team

The people you come across in the early days could end up making up part of your team. When you are ready to hire, you need to be careful with your cash, but the prospective employee also needs to be careful. There’s nothing more heartbreaking than joining a team (or starting one), for it to all come crashing down around you.

7. Grow your business

This is (probably) the dream, and it’s not going to happen without sufficient planning. Having you eyes on the prize is great, but you need to have everything planned at an operational level. Your plan is your springboard for getting your company to the position you want it to be in. Share it with your employees and investors, and make sure that the entire team are all aware of their responsibilities and how they’re going to achieve the goals you’re setting. This is so important, so don’t underestimate it.

8. Make your business agile for changing conditions

You just never can tell what’s going to happen next. A couple of years back, leaving the EU would have been unimaginable. If you told a New Yorker that a reality star would soon be their president, you’d be laughed at. Alas, here we are. Your business needs to be healthy and agile, so when these crazy things do happen, you can act accordingly. Proactive is always better than reactive, so get this wrong at your peril

9. Judge your success – share and explain KPIs and targets

Linked to growing your business, you need to understand how successful you’ve become at all times. You never know who might be checking out all of the amazing things your business is doing from afar, so if you’re ready at a moment’s notice to tell people, you’re going to come across really professional.We are obsessed with metrics here at ESP and for good reason. Departmentalising your business is the best way to keep a handle on what’s going on with it. It’s simply too much to deal with if you’re not looking at each section of your business individually – things slip through the net, and you could be performing worse than you thought. KPIs are fantastic things to measure for individual and team performances too, showing you who is engaged and doing well, and who might be slacking off.

1o. Sell your business

Eventually, you might want to cash in on your venture and retire to the Bahamas. And that is very understandable! Having your business plans logged and followed, your business is going to look pretty attractive to potential buyers.