The main benefit is to have a plan and talking about one is a plus. A plan helps and smooth out unexpected events by being prepared.
The possession of a business plan is of less value than the thinking that goes behind this plan. Most start up ventures find that any planning is quickly impacted by the realities of the market. Large and complex business plans are not always that much use.
In my view the focus should be on the business model, which is not the same as a business plan. The business model looks at the customer or market and seeks to determine what value proposition can be made to the customer. This is determined as much - if not more - by the resources that you can assemble, than by the specific needs of the customer. You should be working within your resources to find the best combination of offers to the customer. You can, and should, look for additional resources from others to supplement your offer. This means that networking and collaboration become key elements in the business model planning.
The business plan should be viewed as a working document that is designed to serve as a communications tool. There are usually at least three types:
1. An application for finance:
This comes in two types. The first is for banks and other sources of debt financing. The typically seek evidence of cash flow and collateral that will allow them to take back their loan via repayments or via liquidation of your assets.
The second is a pitch for equity financing. Here you are taking on a partner and joint owner of your business. They will wish to see what you can do to make them money and depending on who they are will be more interested in growth and exit with a profit. They may or may not wish to help you run the business.
2. A plan for customers and suppliers:
The second type is a plan that customer or suppliers may request. Customers will want to see how well you can supply them and the plan is likely to need to point to your quality control systems and so forth. The supplier is likely to seek evidence of your ability to market and build a growing firm that they can feel confidence in supplying to.
3. A plan for internal use:
This type of plan is one that you will write for yourself and/or your team. It needs to be a blueprint for how you will get things done and may be more operational than strategic in nature. However, this will depend on your business. Such plans are best kept simple and flexible.
The key benefit for planning is help you think through your business model and where it is you want to go. The quality of the planning process is probably more important than the plan itself, but any plan that is not regularly updated and used is largely a waste of time.
Research evidence into the use and benefits of planning is mixed, however, there is a strong case that on balance planning makes a difference. Yet the sophistication of the senior management team within the firm is often the key. Many "hands on" entrepreneurs who have little formal education and learn by doing find formal planning difficult. This does not make them less successful, it just means that if words on a page are less useful to them than action and discussion, they should work with what they know.
the benefits far outweigh the struggles in creating one. With a PLAN you are considering the things the business must face and discovering answers to try to prevent failure. it should include, but not be limited to - Marketing, Operations, Employees, Monthly expences and other factors.
A business plan is the rule book and scoreboard in the game of business. It tells you what your rules are - how you will play / who you will play with / where the game will be / how you keep score / when the game begins and ends. As the scoreboard it tells you if you are winning or losing and should provide a determinant of when to end the game whether you are the champion or being knocked out. If you follow that theme you can watch any ESPN channel 24 x 7 to watch, learn, think about and understand the principles behind business operations.
Helps you to see how good your "business brain" is. If your business brain is not as good as you thought, don't worry, you can take courses, hire a coach, etc. to improve.
1. A carefully thought out and realistically completed businesses plan will tell you how likely your business is to succeed.
2. A business plan constantly updated with actual versus planned data will tell you if you are succeeding and were the problems and opportunities are.
3. When you need additional funding to move to the next level I well maintained business plan is the document that will persuade the lender.
You wouldn't go on a trip to somewhere you've never been before without a road map or your GPS, why would you launch your business without articulating where you want to go and a plan ( map) for how you're going to get there?
If you are already in business, a 'mini-plan' for each phase of business development and growth serves the same purpose in identifying and mapping the results you what to produce and what you need to do to achieve them.
You decide to take a pleasure trip. You have that destination in mind for a long time now. It would be a pleasure trip only when you have the company that gives you pleasure. So you select your company very meticulously. Being the organized person that you are, you make a checklist of items that would facilitate your pleasure. You have invested in that SUV last year only to enjoy the driving, so you take a review of its condition. You are almost set to leave for the trip to experience some ‘Pleasure’... a minor detail you forgot was, the road map!
What will happen in this situation?
You will have to ask for directions every now and then...
You will reach the destination with, may be little, detour...
You will have to face the music by your ‘buddies’ who are restless now...
You will have the trip all the same but with lesser pleasure and more torture...
You will tend to be philosophical with questions like, ‘Why I ‘planned’ this to start with?’
If you don’t want to picture yourself in this situation, you need a business plan. The question is not what the benefits of a business plan are; the question is what the repercussions of not having it are. In Harvey MacKay’s words, “A dream is just a dream. A goal is a dream with a plan and a deadline.” In absence of either of it, a dream is nothing but a wishful thinking like ‘It should be...’
Keep dreaming but develop planning to live your dream! All the best, Take Care and Be Aware!
It provides the road map for your business, a place to verbalize your vision and mission, a tool for creating your strategies and tactics and mechanism for communicating all of that to others.