A business plan is the most important and often overlooked part of running or starting a business, expanding an existing business, or obtaining financing for a business. If a plan is developed effectively, the success rate for the purpose of the plan increases exponentially, whether it be starting, expanding, or running a business and/or obtaining financing for the business.

A well-developed Business Plan leaves less room for mistakes and failures. Although it is not possible to predict everything that will happen in the future of a company, a good Business Plan helps you avoid certain pitfalls, overcome obstacles and anticipate and create business opportunities. When you encounter obstacles and problems, having a Plan built into your business gives you a system and mechanism to deal with challenges effectively, often turning these challenges into manageable situations or even future opportunities.

Let’s start with the fundamental questions: Why have a Business Plan? What can a Plan do for my company?

First, a business plan helps you run a business and is the roadmap for business success. This is the main reason for a Plan, and the plan should be initially written from this point of view. However, there are many other beneficial reasons to develop and implement a plan. A Business Plan forces the different departments of your company to work together to implement a synergistic Strategic Plan. A well-developed plan helps your sales team close more deals and gives them effective tools to use in the field with your customers. A Plan helps your clients understand the direction your Company is taking, encouraging them to become “partners” in the success of your business. Your Plan can help you consolidate relationships with the necessary suppliers, helping them to understand more effectively how to contribute to the growth of your company. A Plan can also effectively help you obtain the necessary financing to start or grow your Business.

Uses of the business plan

There are different formats and purposes of Business Plans for various circumstances and situations. It is recommended to first develop a Comprehensive Plan to efficiently and successfully execute your Business, Venture or Projects. Once the Comprehensive Plan is complete, you can take certain parts of the Plan to form other Business Plans for various purposes and situations, such as a Business Funding Plan for a bank or venture capital firm. A good Business Plan Workbook will take you step by step in developing a Comprehensive Plan, which you can “tweak” for various purposes and uses beyond the effective management of your business.

Internal uses of a business plan

1) Identify the strengths and weaknesses of a company’s operation and potential problem areas.

2) Improved company performance results from the development and implementation of Strategies that simultaneously build on a Company’s strengths and correct its weaknesses.

3) Effectively communicate to Management and Employees clear expectations about a Company’s performance and priorities to ensure coordinated execution of a Company’s Strategic Plan.

4) An Effective Comprehensive Plan coordinates and ensures consistency between the various divisions and departments of a Company to achieve the successful operation of the various units of the Company.

5) A Plan provides a mechanism to measure the performance of a company and an individual. It sets a clear standard for determining whether actual performance is good, bad, or neutral.

6) A Plan establishes a system for making key decisions in the process of Managing a Company. As new developments, opportunities and challenges arise, the Business Plan provides a solid framework for assessing the impact of developments and opportunities on the operations and performance of the Company as a whole and its individual departments and units.

7) The process of developing a Plan will educate and motivate the employees of a Company. Management, Executives and Key Persons know more about the Operation of a Company and the direct relationship of their areas of responsibility with the achievement of the Company’s objectives. This is achieved by analyzing variables such as past performance or the impact of trends and developments, while developing Action Plans for the Company’s future success. The process solidifies the commitment and motivation of its people to achieve the Company’s Strategic Plan.

External uses of a business plan

1) A Plan can update and educate external parties (ie investors, shareholders, suppliers, customers, regulators, legislators, etc.) regarding your Company’s structure, organization, objectives, goals and performance.

2) A Plan can secure financing and investment to finance your Company.

3) A well-executed Plan can get ahead of its competition, making entry barriers evident.

4) Solidify relationships with your customers by making them true partners in your company’s product and service offerings, innovation, research and development, and most importantly, your growth.

5) A plan provides your suppliers with important information about your business so they can help you manage costs and promote growth. A slight change in a provider’s offer or terms can have a dramatic effect on your company’s profitability.

6) A Plan is a sales tool that helps your Sales Team promote understanding among your customer base of your Company’s direction, competitiveness, and uniqueness. An integrated business plan enables your marketing team and sales team to open new markets and opportunities and close more deals.

7) The Plan demonstrates to third parties the fundamental responsibility, beliefs and integrity of your company.