Do you really need a business plan?

In today’s dynamic, IT-driven world, a business plan may sound like a rather cumbersome requirement. It seems simpler just to set up a website, get your phone line running and start trading right away.

But the big benefit of a business plan is that it forces you to get organised, and it helps you to see the bigger picture up ahead.

So what’s included in a business plan? And why is it such an important tool for a startup or growing business?

Anatomy of a business plan

No two business plans follow the same structure, so you can flex the contents to suit your sector and trade. On a basic level, a business plan should show:

• Your current business situation (if the business is already underway)
• Your plans in the short and medium term, covering a few years
• Plans for expansion
• Marketing strategy
• A map of milestones to achieve
• Potential risks (and, ideally, ways to avoid those risks)

When you write a plan, you’re putting goals on paper. The things you say in your document will steer the business in the months ahead. Don’t make claims you can’t back up, and don’t plan to achieve anything that’s unrealistic. Your aim is to develop a solid and coherent business strategy that shows, step by step, how you will grow.

If you’re not much of a writer, you can hire a business copywriter to work on the document with you. Put together some bullet points covering the basics, then ask them to write it up.

What makes a good plan?

Many people think that a business plan is simply there to shine a positive light on their business. While that’s certainly helpful, and a positive sign of success, it isn’t the sole objective of a business plan.

A business plan works best when it’s comprehensive. As you plan for growth, it should force you to think about the feasibility of your plan, and consider ways to reinforce it and invest money in the right ways.

If you’re looking for finance, you’ll almost certainly need a business plan, so it pays to be prepared. Some bank accounts will also ask you to produce one, and they’ll use it to assess whether your business is viable. If you’ve thought about your plan, or you’ve put together a document, you’ll be able to approach the bank with a clear head and a confident sales pitch.

Why skip it?

If you have the funds to finance your business, and you have the talent in place, you might be tempted to skip the creation of a business plan. After all, time is money, and it’s yet another admin task that you might feel burdened by. If you genuinely feel you’ve got a handle on your business, you might want to set the task aside.

However, it can pay to draft something up, even if you just hold it in reserve. If you’ve got the plan at the back of your mind, it can help you to make better decisions and give you better grounding if you do grow quickly. Don’t see your plan as a ticket to a business loan; think of it as a roadmap, and a way to turn your ideas into tangible progress.

The first few years

Planning your business means ensuring that you have healthy cash flow and a decent amount of profit. If your business telephone system is dragging you down, talk to Nimvelo about business VoIP. Whether you’re an established SME or a brand new startup, we’ll help you put the right foot forward.