I read a blog today. 20 reasons why you need a business plan. It was an interesting read. A lot of interesting content.
BUT, personally, I disagree with the premise. It doesn’t make the author wrong or me right. But I do disagree. I would love it if you would indulge me and let me explain why.
In my experience there is only one single reason to write a Business Plan. The ONLY reason to write a Business Plan, in my opinion is to grow your Business. Now you might be growing your Business from start up, or you might be growing an existing Business. Nevertheless, you must be in the business of growing your Business. Otherwise, it’s probably not a Business. It’s a job you’ve created for yourself.
There, I’ve put it out there. I’ve said it.
Interestingly, when a Business Owner sets out to write a Business Plan to work out and document how they are going to grow their Business, there are a lot of interesting side benefits.
- Contingency. If you work out how you are going to grow your Business and you write it down you’ve done an important piece of contingency planning for your Business. If you happen to get run over by the proverbial bus tomorrow, it means someone else can step in and continue the task of growing your Business. Otherwise, there’s a real risk your Business will just die if it’s all in your head
- Planning. In the act of writing a Business Plan, if you do it properly you will….well….plan. If you fill in a template, it’s just words on a piece of paper. If you write a Business Plan because you want to grow your Business, you will go through a process. You will research and test your market, you will critically examine your product, your strategy, your business model. You will probably explore blind alleys in theory before going down them in reality. The process of planning creates a stronger Business that will grow faster
- Value. A good Business Plan is actually worth money. If your exit strategy is to sell your Business, you only have a valuable Business to sell if it runs without you. So that means documented procedures to go alongside your customer database. And a good Business Plan can add actual cold, hard cash value to your Business when you sell it. Because you are selling a growing, viable Business that someone else can step in and run
- Investment. If you are looking to attract funding or investment into your Business, you need a Business Plan. There’s no magic document, no template, no formula that will attract investors. If you document a clear, well-thought-out Business Plan that describes how you will grow your Business, then and only then are you likely to attract investors
There are lots of other side benefits – clarity, direction, creativity, understanding your customers. But they all come from one single process.
Do some proper planning to grow your Business. Write it down. Everything else will follow.
First published in July/August 2023