Business plan writing is tough. A good business plan writer needs to be objective, analytical, and creative – a combination of traits that are hard to find. Nevertheless, launching a new business should be synonymous with writing a business plan. A business plan is a document that can make or break your startup so don’t take drafting it lightly. By using it as tool to getting your business up and running successfully, you chances of finding true success are greater.
It can secure funding
A first-rate business plan is your gateway to funding – be it in the form of equity from venture capitalists or loans from the bank. “[Lenders] won’t even talk to you without it,” says Dallas-based business coach Mike Mirau, “If you don’t have a good game plan, they’re not going to talk to you.”
Because those financial professionals review pitches and proposals day in day out, your business plan should follow industry standard layouts and guidelines without sacrificing creativity and charisma. That way, your document is easier to read – in terms of both form and appeal – and your chances of getting approval increases.
It acts as a viability analysis
This is where subjectivity is most important. One of the most central yet overlooked functions of a business plan is to serve as a viability analysis. Before emptying your 401(k) and signing a 5-year lease on a commercial property, a thorough and honest analysis needs to take place. Is your business idea truly unique to your geographical location and is it a product or service that is legitimately in demand? Are you overestimating the size of your target market? And what about competition? Have you taken into account their reach and that they might take measures to ensure your new business doesn’t cut into their market share? “It's absolutely amazing how many potential business owners include this statement in their business plans: ‘We have no competition,’” writes Andrew Clarke, CEO of Ground Floor Partners, a business consulting firm. “If that's what you think, you couldn't be further from the truth.”
The reality is that 70-80 percent of new businesses fail to reach adequate return on investment levels and that’s why undertaking an objective review of your proposed business’s viability chances in the form of a business plan is a step that must not be overlooked. If your results indicate that your business has little chance of surviving the first few years, then there’s no shame in cutting your losses and moving on to the next project. “The key to bouncing back is to learn whatever lessons you can from the experience so that you can avoid making the same mistakes in the next launch,” says Virgin mastermind Richard Branson. “This will help you to overcome your fear, take a leap of faith and try again.”
It provides a strategic roadmap
Many times, startups find themselves scrambling to stay on top of tasks and keep operations running smoothly. As a result, they can lose sight of their mission and values. A business plan can help guide a startup in its first few years of business by forging a strategic roadmap to abide by. Of course, that roadmap should not be set in stone. As new opportunities arise and circumstances change, so too will your strategic roadmap. However, the guiding principles behind the original roadmap should remain intact. Was your roadmap designed with the goal of creating one of the most innovative PR firms in the country? Design your roadmap today with tomorrow in mind. Check back with it often and adjust as needed, but never lose sight of your overarching vision.