Whether you are starting a business from scratch, intend to expand your business, building an entire new division or seek funding from banks or angel investors, a well-crafted business plan is needed to help achieve your business goals.
Perhaps, plenty questions that still puzzle you about the reasons to have a business plan, and more importantly, the feasibility of a business plan.
Why business plan for SME (small- and medium enterprises)? At GE Consult, our business plan consultants have helped many local and overseas entrepreneurs, CEOs and business owners to create their business plans. The latter serve as roadmaps that provide the overall business directions while precisely chronicling the entire budgets, operational flows and sets of business objectives.
There are so many good reasons for SME to create a business plan, we observed at GE Consult. Let’s consider a change with us here revealing the most important reasons you really need a business plan.
#1 Reason : To Determine and Share Your Business Directions
A good business plan helps you determine your business directions, and providing guidance to your shareholders and stakeholders through sets of business objectives in short-,medium- and long-term basis.
I believe you already know the obvious most important reason after reading the #1 reason above. That said, a good management requires setting a company direction with very specific departmental or divisional business objectives for periodic performance tracking and reporting. Frankly, I’m so surprise that how many existing SMEs manage their businesses without a plan, without a clear direction, without business objectives and so on, within a given period.
I can only imagine if the entire 11 football players went to the field and played their “own ways” without the coach’s directional strategy.
#2 Reason : To Grow Your Business
Establishing a sound strategy with proper resources allocation is imperative. Resource is scarce, whether a start-up or existing business needs appropriate budgeting to cater various strategic priorities. Buy or rent decision is an excellent example to illustrate, the choice between buying an office or renting one is among biggest financial decisions that entrepreneurs make. Ask yourself how do you begin with the more varied costs of buying an office than for renting, which is a better deal? How would you do to justify the increased fixed costs? Would you consider pursuing on variable costs instead? Shouldn’t the decision be in your business plan?
#3 Reason : To Seek Funding for Your Business
If you are seeking funding for your business, whether it is a start-up or an existing one, all investors, venture capitalists, lenders or bankers require a formal business plan for them to decide. In order to attract such funding, a well-rounded business plan will provide them valuable insights into your venture, of course, all investment criteria ought to be achieved.