The Importance of a Professional Business Plan
According to recent studies, nearly 75% of all small businesses fail. Why is this? There is no one defining factor that you can attribute to a business’ success or failure, but the business plan helps to clarify the direction of the business, communicate the vision, provide accountability for the owner, and position the business to receive funding.
1. Clarifying the direction of the business
Often times, the individual who starts a small business is an entrepreneur at heart. They have a true passion for what they do and constantly have new ideas. This can be both a positive and negative attribute when it comes to business.
The positive nature of this attribute is that the owner is very innovative. They have new and fresh ideas and will do anything to help their business succeed.
The negative nature of this attribute is that the owner steers the business in multiple directions. Although innovation is essential, all of these ideas must contribute to advancing the overall goal of the business. Having a written business plan sets the direction the business is going and all ideas should be checked against this goal. The direction of the business should rarely, if ever, change.
2. Communicate the vision
Most small businesses must require the help of others. No individual can read the mind of another and therefore, a solid business plan is needed. This plan helps to communicate the vision of the owner so others can understand. Employees should understand both the direction and vision of the company so they are able to contribute.
3. Provide accountability for the owner
Business plans provide a sense of accountability for the business owner. This may be a physiological trick, but it often works. By writing your plan, you may feel more obligated to turn this idea into reality. Setting timelines and establishing goals also motivates you to build or expand your business.
This plan is not only a self-motivator, but is a tool for others to use to motive the owner. If the owner ever feels they are unable to achieve their goal, or begins to lack confidence, this written plan can be used by others to push the owner to make their dream a reality.
4. Position the business to receive funding
Investors are more inclined to contribute to a business if they have a clear plan and direction. Having a written business plan is a professional way to present your business idea to investors. This shows them that you have invested both time and effort into creating this business and have a clear goal of what you want to accomplish.
Business plans should not be taken lightly as they can either help propel your business to success or be the cause of it’s failure. Spartan Marketing Group specializes in writing professional business plans. These plans identify what you sell, who you sell to and how you will sell to them. These three things are the core of any business.