Monday, 19 March 2018

Information and commentary for the small business banking industry

The importance of a great business plan

26 Aug

Think of a business plan as a blueprint for a business. Not only is it needed to show potential lenders and investors, but it’s what will lay out a business’s goals and objectives, and will keep a business on track throughout its life cycle.

A well-thought-out business plan provides a sense of direction, and as well as providing a benchmark for measuring business success. For all those reasons, it’s a good idea for a business’s key employees to read and review the plan, so that everyone’s on the same track.

The best business plans are those that are short and to the point. Overloading it with lengthy detail will make it difficult to read and take in. The process of writing the plan itself should help to crystallize ideas and identify priorities.

It’s important to be realistic when writing or updating a business plan. For example, unrealistic sales forecasts could lead to increased overheads followed by a damaging cash flow crisis and drastic cost cutting.

Once a business plan is written, it should be kept close at hand and reviewed regularly. Don’t make the mistake of ignoring it once the business is through the start-up phase. Revising and updating the plan will keep it relevant as a roadmap for the business.

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