Research has shown that those with a business plan are more likely to:
- Secure funding– 36 per cent were successful with a plan compared to only 18 per cent without a plan; and
- Increase business– 64 per cent saw growth in a 12-month period compared to 43 per cent who stayed the same, decreased or closed altogether.
But these aren’t the only advantages to having one, here are my top ten reasons you need an up-to-date business plan:
- Vision – Your vision is an important part of your business. What you see your business potentially becoming is just as important as how you see your business right now. A business plan gives you the opportunity to clarify and express your vision in a way that others can understand and relate to.
- Money – Not knowing which things to spend money on, spending money now when you should be saving it for a bigger project coming up later. Not knowing your monthly expenses or how much your income targets should be are all ways you can lose money without a proper plan. Your financial plan is an essential component of your business plan and a realistic estimation of your future projections can help guide your decision-making.
- Customers – Similarly attracting the right customers doesn’t happen by chance either. A key component of your business plan should include identifying your audience. Knowing your ideal customer and things about them such as who they are, what they like, where they live, what makes them tick are the kind of things that your business plan should help you identify. Understanding your niche has benefits that flow onto other areas of your business including product design, your marketing message and even your advertising budget. Trying to appeal to everyone by not knowing or understanding who your real audience is, can be both costly and a waste of time and resources.
- Success – A successful business is what we’re all striving for, but how can a business achieve success if they haven’t defined what success will look like for them? If they’re waiting for the day they’ll become a millionaire, without a clear map of the steps they’ll need to take to become one, they may as well just keep waiting. On the other hand, if they’ve mapped out exactly how much they need to make each day and how many products they’ll need to sell to make one million dollars and the resources and team they’ll need to do that then they have a far better chance of reaching that goal. Having a plan allows you to know what questions to ask, what goals to strive for and what needs to happen on a daily, weekly, monthly or annual basis to grow your business. As Confucius says “Man who plans for nothing, gets what he planned for.”
- Health and wellbeing – If you don’t run the business, the business will run you. With no clear boundaries around your time and always more work to do, it’s easy to get into the habit of working almost 24/7. This “workaholic” lifestyle eventually starts affecting your health, your relationships with friends and family and ironically even impacts negatively on your business. This is not how your relationship with your business should be; your business should be like a friend who helps you not a burden who takes the best of you. A healthy and balanced life is an important part of having a successful business and knowing what you want for your life should be a part of your business plan too.
Katy Garner, co-founder of The Women’s Business School, The Business Mothers Collective and AusMumpreneur Network
