Why Business Plan Is Important for Small Business Success
A business plan is important for small business success for a number of reasons. Here are several good ones:
- Acquiring bank finance
- Raising equity capital
- Achieving growth targets
- Maximising profit
- Building recurring income
- Leverage passive income streams
- Achieve the freedom and lifestyle you deserve
- Increasing the value of your business
- Developing and exit strategy
A great business plan for small business owners needs to be a living document with action plans that build execution into your strategy. Nothing changes if nothing changes so to speak! It is one thing to plan, and another to implement your plans.
Banks these days are less willing to lend to small business owners today than they used to be. At one time, it was sufficient to have equity in your home in order to get a small business loan, but fortunately, banks these days generally require a pretty well thought out plan before they will lend money for small business growth. In business, it always comes down to the numbers, so it is essential to cover all aspects of financial forecasting, via a 3 way financial forecast. This refers to a forecast that includes Balance Sheet, Cash Flow and Profit and Loss reports for a 1 – 3 year period. A great plan may even assist small business owners to negotiate a lower interest rate.
The same may be said for raising equity capital. Savvy businessmen will always want to see a well documented business plan, covering Operations, Marketing and Finance.
Setting targets, and measuring progress against those milestones is one of the main practical reasons for having a well documented business plan. You can only manage what you measure!
It goes without saying that a great accountant is a very important member of your advisory team. However, often the focus is on taxation accounting, which deals mainly with the history of the business. A well developed business plan is a powerful tool for predicting and attaining your business goals and objectives. A business plan that is real and attainable increases the value of your business, should you wish to sell your business or retire.
Business Pilot offers simple affordable business plans that can be created with the assistance of a Business Pilot business coach. If you are inclined towards DIY we can recommend LivePlan as powerful and effective planning tool. Personal coaching will add tremendous value to the planning process, whether for 1 hour, 1 day or via an in-house workshop with your team, specifically structured for small business owners. We are available for a complimentary strategic coaching session at your convenience, call 1300 730 986 to arrange a time.
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