WHAT ARE THE THREE MAIN PURPOSES OF A BUSINESS PLAN
WHAT ARE THE THREE MAIN PURPOSES OF A BUSINESS PLAN
Creating a business plan is not an easy task. It can only be made simple or effective if it’s been worked upon by a professional. Ultimately, getting your thoughts down on paper will prove invaluable for obtaining start-up funding but its shows you are on the right path to get the required fund for your business and thus, the potential future success of your enterprise.
A business plan is used to help manage a business by stating ambitions, how they will be achieved, when they will be achieved. The plan will also help to summarize what the business is all about, why the business exists, and where it will get to. Your business plan will serve as a key point of reference for investors, partners, employees, and management to measure the progress in your business. Before you write your business plan, it is important to understand the main purpose of writing it. Below are the three major purposes of writing a business plan.
- ESTABLISH A BUSINESS FOCUS
A detailed business plan will help you as the owner to establish a plan for the future. These plans should include goals and how your business will reach each step. The process of creating a road map to your goals will determine the business focus and pursue growth.
A detailed plan will help you as the owner of the business to manage your business effectively. It is good to know that writing down and illustrating both your ideas and tactics will establish a path and course of action, hence, creating something concrete to monitor and assess the progress of the business. This will enable you to have a focus and make further plans for the future. However, you need to understand what you focus on; as an entrepreneur, when writing a business plan, you are defining exactly what your business is today, and what it’s going to be tomorrow. This arrangement concerning the purpose of your business and the direction you are heading to is invaluable.
A business plan is a plan for action, by giving your business focus; you now have a focus and target to shoot both in the short and long term. These targets/goals also mean that you can adjust and correct if you realize that you need to make some changes in order to meet those objectives. When you establish a business focus, it will help you with the following:
In your business plan, once you establish a focus, you would have clarity of idea about the business, i.e., what you specifically want to do and why you want to venture into that kind of business. For example, an entrepreneur who seeks to venture into a fashion hub can get a clearer vision of ideas from H&M or Versace. This also helps to draw inspiration from mother companies or respectable brands in society.
- Distinct your Business from Competitors’
A business plan that is well-tailored helps you to know your likely rivals in the industry. Here, you need to know that if you fail to create a powerful and distinctive difference for your customers, your product and services will be viewed as the same as your competitors. Hence, create a system that will make your product different from your competitors. Also, having a business focus, you must strive to market with a different in other to outsmart your competitors. If your sales process is so dynamic that your prospects (potential customers) see you and your vision irresistible, it renders your competitors irrelevant in the industry.
Read Also: HOW DO I WRITE A SMALL SCALE BUSINESS PLAN
WHAT ARE THE THREE MAIN PURPOSES OF A BUSINESS PLAN
- SECURE FUNDING
In business, one of the most important things you should include in your business plan is how to attract investors, banks, or other lenders. To this end, it is important for you to have a well-researched business plan. Investors want to know how you operate your business, what your revenue and expenses projections are? And importantly, how they will receive a return on their investment? While you are carrying out this research, you will be exposed to important trends in your industry, and also help you provide answers to questions, such as what is the size of the market for your products/services? What are the greatest threats to your industry?
Creating a business plan will help you to gain a wider, deeper, and more detailed understanding of your market. It will allow you to use this knowledge to make decisions.
In addition, in order for your business to grow, you need support, which requires injection of funding from outsiders (investors), unless you have a huge amount of money to finance your business to the highest level. More often than not, as a growing business, you probably won’t have enough customers and thus, limited cash to finance your business. You need to have a working capital requirement and thus, you need some funding that may currently be beyond the reach of your business. Basically, you will have to approach the potential sources of finance, and part of the requirements is for you to prepare attractive statements in your business plan. Investors want to know that you know what you are doing. A business plan can often be seen as the most important document you can present to investors that will provide the structure and confidence that they need to make decisions about funding and supporting your business.
- ATTRACT EXECUTIVES
As your business grows, you will likely need to add executives to your team. A business plan helps you attract executive talented individuals and determine whether or not they are a good fit for your business. To attract and retain a top-quality, a well-detailed business plan is necessary. The business plan inspires employees and with a good management team, the business is poised to achieve its strategic goals. Importantly, as the business is growing, your employees will do most of the work. So, getting them aligned and motivated will be important for your business to succeed.
Also, a business plan is written to give a glimpse of the team’s productivity. It shows a great level of performance that uses the lowest inputs to create more outputs. It can be expressed as the ratio of the output to the inputs in the production process. This will help you in decision making; whether to increase or reduce the number of people that work with you.
If you need a service of a Professional Business plan writer, then Dayo Adetiloye Business Hub is the place to go Call or WhatsApp us now on 081 0563 6015, 080 7635 9735 or send an email to dayohub@gmail.com and we will solve any of your business plan problems.
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Call or WhatsApp us now on 081 0563 6015, 080 7635 9735 or send an email to dayohub@gmail.com and we will solve any of your business problems.
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