What is a business plan and why is it so important?

Business planning

In today’s blog we’re going to take a brief look at what a business plan is and, more importantly, why it’s so important to the success of any business big or small. This information might be a little dry but it’s absolutely vital for the long and short-term success of any type of business that you want to start.

A business plan, at its most basic, is simply a set of action steps. Every action that you’ll need to take in order to start, and run, your business, should be included in your business plan. These actions could include finding and renting a location for your office, putting together a sales team, purchasing equipment, determining what advertising will deliver the best ROI and so forth. Basically, anything and everything that you can think of, laid out step-by-step. A well-conceived business plan might convince you that your business idea isn’t as valuable as you thought it was

A business plan should also, like a good story, start at the beginning, and answer a number of important questions, including; what exact business do you plan to start, what will it create, who is the market for the services or products you will produce and how will your company make money?

The best business plans ask, and then answer, the most important questions. In other words, they are the most specific and the dig deep into the why, what, where, when and how of your business idea.

The reason creating a business plan is so essential is this; the more in-depth your business plan, the easier it will be to spot any challenges, problems or needs that your business might have before you start. If you can spot those problems and challenges early on, you can either avoid them or come up with solutions to them before they become big problems.

Indeed, once you’ve put together a business plan you might decide to completely change your idea about what business to start, or not even start it at all. The fact is, a well-conceived business plan might convince you that your business idea isn’t as valuable as you thought it was, and might save you thousands, or even hundreds of thousands, of pounds that you might have spent on a business that was doomed to fail from the beginning.

There is also one other very important reason to put together a detailed, specific business plan; funding.

A well thought out business plan is one of your most valuable tools when seeking any type of funding for your new business. Even if you’re simply going to ask family and friends to lend you money, having a solid business plan will go far in convincing them to back your project.

If you’re going to need a substantial amount of money, and will be seeking out a bank or “angel investor” to give it to you, your business plan will be invaluable in helping you to accomplish that task.

Hopefully you now realise how important a business plan is to your future success. If you have any questions about business plans, or need any help creating one for your new business, please get in touch and we’ll be sure to get back to you with advice and information.