7 Things That Will Happen To Your Business If You Have No Business Plan
Planning is everything, they say, and “he who fails to plan, is planning to fail.” The planning stage of any project is considered one of the most important aspects, as this will guide you on what you’re doing. Most times, the amount of preparation you put into a project determines largely the success of the project. Planning helps you see things in different aspects, and it helps with the thinking process.
A business plan is a carefully written document that defines how a new business aims to achieve its goals. It is a basic tool that any new business needs to have in place before going into the business. Business plans helps the company to lay out its goals, and the steps to take to achieve them. It is also a way to track a company’s progress.
Business plans are mostly used by new companies when they’re just starting out, but every company should have a business plan. There might be a need to go back to the plan to see if the goals laid out have been met, or have changed over the years of business. A new business plan can also be prepared for an already established business that is changing its course.
Starting a business without a business plan is not a good idea. Not many companies can last without a plan, though some may. The benefits attached to having a business plan is more than the downside of it (if any). A good business plan does not have to be expensive, or tasking.
A good business plan should lay out all the costs and failures of every decision made in the company. No two business plans can be the same, because what one business needs is quite different from what the other needs to thrive. The capital needed for different businesses are different, and so are the challenges that will be faced in the business. A business plan also involves a detailed description of goods and services the company is to offer.
A business plan can be said to be the distinguishing factor between competitors. It is what differs a business from the other, even if they offer the same services, or sell the same products. Business plans are like road maps in a business. You can afford to travel without a map, but it only puts you at risk of missing the road along the way. So, instead of putting yourself in a situation of getting lost, it is essential that you take your road map along with you.
Instead of having to stop over in your business journey to ask for directions, or even have to start all over because you’ve gone too far, why not take a road map (business plan) to guide you. Business plans helps you to see the bigger picture of your business, it allows you to plan for the future, and to make critical decisions. It also improves the chances of success of a business.
You don’t have to take all kinds of risks, or get involved in all kinds of investment for your business. A good business plan helps you to know the risks that will be profitable for your business. Most entrepreneurs think they do not need a business plan to have a successful business. While that may be true, a business plan will go a long way in making sure your goals are achieved.
Below are 7 things that will happen to your business if you do not have a business plan.
- You make irrational decisions
Business plans have the primary objective of helping you to make the right decisions. Without one, you make decisions at the spur of the moment, which may not be best for your business. Entrepreneurship requires that you make a lot of decisions, it is only wise that you carefully make those decisions to ensure the success of your business. Preparing a business plan helps you to answer some critical questions before they come up.
Without a business plan, you tend to come up with decisions as situation arrives, this would have been addressed in a business plan if you have one. You might not have the time to sit down to think about decisions and solutions when issues come up in your business, but a business plan helps to plan ahead for almost any kind of issues that might come up.
- Your business won’t be taken seriously
A lot of businesses are created out of passion, or the need to solve a problem, but this is not all that is needed to prove your business’ viability. Business plans help you to ascertain that your great ideas make sense for a business. Anybody can come up with great ideas in the bathroom, but not all of these ideas make business sense.
Your business plan serves as a proof that you’re going somewhere in your business. You get to be able to stand to defend the course of the business, if need be. But without a business plan, investors or even customers won’t take you seriously.
- You’re liable to make critical mistakes
It is often said that if your new business can last five years, it can last a lifetime. While there are a lot of reasons many businesses do not last, absence of business plans is common. Creating a business plan helps you to avoid making critical mistakes in your business. As much as mistakes cannot be totally avoided in a business, especially when you’re just starting out, but a business plan can minimize them.
Whether it is cash flow forecast, or market survey, every aspect of a business plan can help to rule out some critical mistake. Some mistakes can be avoided while starting a new business, and a business plan is a great tool to help with that.
- Long term decisions are vague
Business plans allows you to see beyond the present state of your business. It helps to forecast the future of the business. No one knows what tomorrow holds, but a business plan can give you an idea of the future of your business. Without a business plan, making present decisions would be difficult, not to talk of long-term ones.
Even if you manage to make long term decisions without a business plan, they will only look vague, with no clue as to how to achieve them. A business plan can go a long way in helping you work towards achieving your long-term decisions.
- It will be difficult to pass information across to your employees
You won’t always be available to make all the decisions yourself. Your business plan can be a substitute teacher, to answer any questions your employees might have. If there’s a business plan, they don’t have to wait for you to take some steps, they can refer back to the plan if they have doubts. Also, you can’t remember all instructions you want to give your workers per time, but the plan is standard and can contain any information concerning the business.
Let your staff know that they can always go back to the business plan when they have basic questions or doubts about the business. This will save you a lot of stress as the business owner. But without a plan, you won’t be able to effectively communicate the goals and objectives of the business.
- Risks are inevitable
Starting a new business involves a lot of risk, but the risks are more manageable if tested against a well written business plan. Drawing up income and expenditure projections, operational plans, and market survey helps to reduce the risks involved in a business.
Without a business plan, you leave your business in the hands of mere chance, which is not what your business needs to survive.
- Securing finances will be difficult
If you plan to secure loan from a bank, or to pitch to venture capitalist, you need a business plan. Nobody wants to put their money into something they know nothing about. Having a business plan makes it easy to show investors that you have something great to do with the company. It helps to position you for opportunities to get finances for your business.
It will be difficult, or impossible to raise capital for your business from outsiders if you do not have a plan. As much as they want to hear what you have to say, your business plan is quite necessary too.
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