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Why All Successful Businesses Have a Business Plan
Ever wondered how the most successful, stable businesses get to where they are today? While there might be an element of luck or chance in how a business idea comes about, many can attribute part of their success to having a robust business plan in place.
From long before “day one”, a business plan serves many purposes, and evolves along with the business from start-up and growth phases, all the way through to the sale or succession of the business many years down the line.
In this article, you’ll learn what a business plan can do for your business at each of those critical steps, and how it sets you up for success.
Starting Your Business
In the interest of putting the horse before the cart, and not the other way around, you should have a business plan in place before you commence operations. Having a thorough business plan documented means you’ll have greater certainty around various aspects of the business (and you can tailor your expectations to suit). The actual process alone is a testing bed for business ideas and ensures that there is real logic behind them.
It will also enable you to start your business in the right operating structure (more on that here), and the tricky initial phase of business ownership will be made that much easier by having fewer surprises (some of which can be costly) and more of the ground work done ahead of time.
A documented business plan can also be important in securing any upfront investment. For business loan applications, particularly those in the start-up phase, lenders will want to see that you have given due consideration to the financial aspects of the business (revenue projections, costs, capacity to repay loans etc.) before they lend you any capital.
Similarly, if you are looking for investment from an investment group, venture capitalists, angel investors or similar, they too will need to see a business plan, often in the form of a pitch deck. No matter where you’re looking for upfront capital, a business plan is key to securing it.
Operating & Growing Your Business
Once you’ve navigated the start-up phase of your business, a business plan becomes an important reference tool in keeping everything on track.
Where the initial phase of business can lean heavily on it for financial projections, over time the focus may shift more to the operational side of your business where you can look to the plan for guidance on marketing (e.g. seasonal promotions, customer profiling, marketing tools), operations (e.g. organisational chart, management responsibilities, licensing requirements), and even legal considerations (e.g. risk assessment, intellectual property, council approvals).
Aside from keeping everything on track, a good business plan can also serve as a living document – in that it doesn’t necessarily stand still. As your business grows and evolves, the market changes, or new opportunities arise, it can, and should, change. Pivoting your business and updating the document to suit ensures that there remains a structured and thorough playbook by which your business can operate, even as things change.
Exiting Your Business
Succession planning is something that many business owners put off until they’re close to leaving their business or looking to sell. However, careful planning can make your exit from the business as smooth as possible. If you decide to sell the business, having a robust business plan in place, and the necessary records to demonstrate its effectiveness can assist in maximising the sale price you receive and also ensuring those left in the business know they have a plan for the present and future. If you plan to hand over to the next generation or a senior member of staff, it serves as a documented guide on how the business is structured, relevant operational information, strengths, targets and much more.
How MP+ Can Help
The Business Improvement team at McKinley Plowman have combined decades’ of experience in helping clients establish a thorough and actionable business plan to set their business on the road to success. No matter what stage of the planning process you’re at, there’s something we can do to assist – get in touch today on 08 9301 2200 or contact us via our website, Facebook or LinkedIn.
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