Business Planning Benefits Explained

The discipline involved in preparing a formal written business plan will stand any business owner in good stead as their business grows, whereas anyone proceeding with a business venture of any kind without one, is generally at short odds not to fully capitalise on the opportunity, that they seek to exploit for profit.

Preparing a formal business plan can be an eye opener for someone without a business degree or previous exposure to formal business planning processes. Business owners, who engage consultants to help them in this process, quickly become aware that there can be a lot more strategic and operational matters to be considered than they expected, and they often acknowledge that their limited understanding of the importance that these matters assume as a business grows, would most likely have cost them dearly if they had proceeded without a plan.

A business owner contemplating creating a formal business plan should consult others (which should at a minimum include legal, accounting and business advisors) who will question their assumptions, their projections, the substance of their offering to the market, and even their competence to successfully translate their ideas into a viable and sustainable business. The investment made in engaging these advisors is generally money well spent, providing of course, that the advisors are chosen carefully.

I would suggest that a business plan will never be passé, and I am confident in saying that anyone who prepares a comprehensive plan before embarking on the launch of any business venture, will give themselves a far greater chance of succeeding, than if they proceeded without one.

The most obvious benefits that a business owner will gain from the process of preparing a comprehensive business plan include the following;

a) It will force a move down from the big picture solution to the level where the detail becomes critical to the overall success of the business, and the planning required to co-ordinate all activities effectively and efficiently, becomes self-evident.

b) It will allow an early determination as to the feasibility of the proposed business activities relative to the human and financial resources definitely available to commence operations.

c) It will assist in setting the business owner’s vision in concrete, and from there allow the formulation of realistic goals, and appropriate schedules for the completion of these goals.

d) It will provide a framework for the guidance of those charged with implementing various components of the plan as to where their activities fit in relative to the achievement of the overall business objectives.

e) It will allow for financial control in the form of the allocation of budgets for each of the tasks which need to be undertaken in building the business to become a viable concern.

f) It will provide a scorecard of sorts, against which progress can be measured, necessary adjustments made, and final outcomes evaluated to determine the effectiveness of the actual planning process in the delivery of the results expected.

g) It will provide a certain level of confidence in that the planning process will have taken into account all of the known variables, thereby reducing the risk of the unknown by a significant degree and  as a consequence, providing a more solid platform upon which to grow the business.

h) It will ensure that all statutory and regulatory factors are known, the necessary compliance structures are established from day one, and all necessary training requirements are scheduled and managed.

i) It will instill the discipline of the planning process for the future years that the business will be operating, and the lessons learned from evaluating the effectiveness of each year’s process, can be utilised in making the following year’s planning more robust.

The preparation of the initial formal business plan does not have to be a laborious or expensive process, although the more time taken and the degree of expert input involved, may mean the difference between an average plan with average outcomes versus a dynamic well structured plan designed to maximise the profit opportunity for which it has been prepared to exploit.

The old adage, those that don’t plan are actually planning to fail, holds as true today in business as it always did. As a business owner, it is your responsibility to plan for the success of your business, and the extent that you embrace this responsibility, will determine the future profitability of your business.

Are you planning to succeed through embracing a formal business planning process?

If you are not familiar with such a process, are you willing to learn the process or engage those who can assist you develop a realistic plan for your business?

Can you see that an investment of time and capital into ensuring your business has a formal business plan as the framework for its future growth, will return great dividends to you, as the business owner?