The Importance of a Business Plan
Developing a well-thought-through business plan (BP) is an important activity when launching a new business as well as when you’re growing an existing one. There have been differences of opinion on the value and importance of developing and maintaining business plans early. In the past, the controversy has come from a tendency for business plans to be shelved after they’ve been created and never revisited or used for guidance as the business grows.
During this difficult and challenging time—personally and professionally—many of our businesses are being impacted by the COVID-19 pandemic. We are being forced to figure out how to continue doing business in a new world.
Again, developing a well-thought-through business plan is an important activity when launching a new business, but it is also something you can do even if you’re already in business. And there is a real benefit in revisiting your business plan now if you have not done it in a while.
It is my strong guidance that a business plan be drafted early in your company’s launch and revisited often. And you can start small. My advice is to create something of a presentation, with a slide for each section of the business plan, and simple bullet points on each slide to help you get your thoughts in order before you start writing the BP. What follows are the slides I suggest you start with:
- Executive Summary
- Company Focus, Mission and Vision
- Present Situation Highlights
- Liquidity Objective
- Management Responsibilities
- Business Descriptions and Services
- Marketing and Business Development Analysis and Strategy
- Operating Plan
- Financial Information
Back when my partner and I launched our company, Computer Systems Technology (CST), we did develop an initial business plan, but then it sat on a shelf and we didn’t refer to it that I can remember. Looking back on our early CST days, we floundered somewhat because we hadn’t first defined our market focus and we also didn’t think through how to distinguish ourselves from our competition.
Your business plan functions to provide you with objectives and strategies to guide the operational activity. It should include your business offering focuses, a description of what markets you will pursue, your management and leadership strategy, and it should clearly define your ultimate company objective. If revisited often, it becomes your roadmap for the current year and will lead you to a successful ultimate liquidity event, or whatever your end goal might be for your company.
As your business grows, it will be important to revisit your business plan quarterly. Assuming it is well developed, an important benefit is that it will provide you and your leadership team with your business roadmap. Additionally, developing and revisiting your BP can help you identify your “why,” it can help you get organized for the future, and it can help you adapt and pivot in these changing times. The COVID-19 pandemic has forced many of us to rethink what we do and how we do it, and now’s the right time to relook at the viability of your BP.
What has been your business plan development experience and what would be your advice? When was the last time you revisited your business plan?