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Business Plans: Why they are important and how they can help your business thrive

Oct 28, 2022 | News

What is a Business Plan?

Have you ever had a brilliant idea only for it to go nowhere? Was it because you failed to plan? Or was it because you did not document the idea or the vision?

A business plan details the core vision, short- and long-term goals, and strategies for the success of the business and allows owners to make informed decisions, whilst being held accountable. It is a guide to where the business is currently and where it wants to be in the short and long term.

An effective business plan should be easy to understand, sets clear goals, and ensure there is a realistic time frame within which to achieve those goals. Business plans can be used as tools to assist in securing finance and will guide potential investors, all the while serving as an internal roadmap for the business to keep track of the ever-changing market conditions and any new opportunities that may arise.

Why do you need one?

Most business owners want financial freedom, freedom of mind and freedom of time. Taking the time to really hone in on what you want out of your business will help you to achieve these three freedoms. A way to achieve this is by having a business plan. Business plans are a key tool to track progress and achievements.

What will happen if I don’t have a business plan?

Often, we hear the phrase “if you fail to plan, then you plan to fail”. If no business plan exists then it is challenging to know or track how the business is performing, or to identify the areas of the business that need improvement. A great business plan is one that gets revisited, monitored and updated on an annual basis.

Who are the users of a Business Plan?

Here are some examples of business plan users:

  • Owners
  • Investors
  • Banks
  • Lenders

What will be the best business plan format for me?

There are many business plan formats, but here are the two most common types are:

  • Traditional
  • Lean

A Traditional business plan is longer and therefore takes longer to write and develop. It isn’t uncommon for investors, banks and lenders to request this type of plan.

A Lean business plan is the abridged version of the traditional plan. It sets out to captures only the crucial information about the business. It is usually created to modify or update existing plans. Typically it is used by business owners to keep track of whether they are meeting the business’ short- and long-term goals. Think of it as a pulse check.

How often should I do a business plan?

Business plans work best when they are reviewed at least annually. An annual review can highlight where the business has improved, where business conditions have changed, or, identify areas where further improvements or investigation is required.

When circumstances have changed, the business plans must reflect the changes, keeping it accurate and tailored to your current business situation. At Stone Bridge Associates we can help you with your business plans. We can create, monitor or review a plan based on your needs.

Should you wish to create, amend or review your business plans, contact us today for an obligation-free discussion.