Advantages Of Writing A Business Plan For Your Small Business

This article seeks to highlight the advantages of of writing a business plan for your small business:

  • The Business Idea
  • Vision Statement
  • Mission Statement
  • Financing
  • Management
  • Marketing
  • Customer Service
  • Financials

There are different types of business plans for different businesses. For example, if you are  a practicing engineer, accountant, surveyor or doctor, you do not need to write a detailed business plan.

However, if you are in other businesses where you will need to seek funding from financial and government institutions in future, you will need to write a comprehensive business plan.

In other words, the business plan you need to write should depend on the side of the divide you belong to. In any case, your business plan should be tailored to meet the needs of your business.

Business Idea

Every business starts with a business idea. Before you think of starting a business, you obviously must have had in mind several types of businesses from which you hoped to choose one.

Let us assume that you have chosen a particular business. We now need to look at the contents and advantages of writing a business plan for your small business.

Vision Statement

Your business plan should include a vision statement. A vision statement is a declaration of your business objectives, intended to guide you in decision making.

Therefore, your vision statement should be:

  • Short,
  • Concise,
  • Be clear,
  • Be stable
  • Have a time frame
  • Be challenging

Furthermore, your business plan should state in clear terms all the feats you want to achieve in your business. For example, the vision statement in your business plan might include offering high quality products or services at affordable prices.

Mission Statement

As Benjamin Franklin aptly put it, “if you fail to plan, you are planning to fail”. From the above statement, you can see that the need to write your mission statement becomes more obvious than ever before.

Your mission statement should include, among other details:

  • Your aims and objectives
  • The brand you want to promote
  • Where you want your business to be
  • When it should get there
  • And how it will get there.

One of the major advantages of writing a business plan is that it should provide a road map for your business. It is the road map created in your mission statement that should guide every bit of your business activity.

In other words, it is a document you should be referring to from time to time like a dictionary. Therefore, your mission statement should be summary of all your research findings on the business you want to start.

Beyond that, your business plan should enable you to remain focused on your original vision of your business.In addition, it should set out in clear terms the policies and programs that should regulate the internal running of your business.

Remember that success is WHERE PREPARATION AND OPPORTUNITY MEET.

Business Plan: Financing

Still another advantage of writing a business plan is that it should show how you are going to finance your business. For example, it should include details of the sources of the startup capital; i.e. whether the business will be solely financed by you or you are getting financial lifeline from family and friends.

Another reason you need to write a business plan for your small business is that it should come handy when it is time to seek funding from financial institutions. Again it should be of immense advantage to you to because this is one of the documents lenders will want to look at when considering whether or not to create a credit line for you.

Business Plan: Management

A strong management team is a must for your business to be successful. So your business plan should show the of your management team.

The advantage of including details of your management team in your business is that it should identify key positions to be filled by competent and capable hands. Do not forget that the quality of your management team should determine, to a large extent, how smoothly your business will perform.

In other words, the success or failure of your business should depend on the effectiveness and efficiency of your management team.

Most importantly, another advantage of writing a business plan for your business is that it should enable you to work out, in advance, the strategies and tactics you will use to:

  • Fight competition and stand out from the crowd
  • Cope with current and likely future challenges that your business might face.
  • To state in clear terms who should succeed you if the unexpected happens.

Most importantly, your business should not shut its doors just because you are no more around. It should continue to operate even after your departure to the other side.

Document Your Research Findings

Another advantage of writing a business plan for your small business is that it should document all your research finding about your business. It should be advantageous to you because any one of our team can refer to it from time to time like a dictionary if they are in doubt about anything.

Therefore, the business plan should include detailed findings in terms of:

  • The level of competition in the market
  • Your target market; that is the people you hope to sell to
  • Where your potential customers live
  • Their buying habits
  • If possible, your observations in terms of their tastes, choices and preferences.

Another advantage of writing a business plan for your small business, is that it might be possible for you identify likely future threats to your business. In the same vein, it could also throw up some business opportunities that you can take advantage of and turn into profits.

However, remember that you will need to review and update your research findings as you continue to know more about the market, your customers and the competition.

Business Plan: Marketing

Yet another advantage of writing a business plan for your small business is that it should work out in great details how you hope to drive sales in your business.

Your marketing plan should show how many of each product you should sell in each location, marketing budgets for each location as well as how you should track your income and marketing expenses.

Marketing plan should contain as much information as possible because it an area some investors and lenders will like to look at when thinking of doing business with you.  It should be a bad news if you open your doors to business and no one is coming to buy. That is not what you want.

Customer Service

An effective and efficient customer service is very crucial to the success of your business. Moreover, your business plan should show how you hope to use excellent customer service to retain your existing customers while attracting new ones.

You should be at advantage if you are able to provide exceptional customer service that should help you to craft and project an enviable image for your business.Therefore, your business plan should be one that works out all the methods and tactics needed to ensure that your customer service reps add value to customers’ user experience.

Financials

Another advantage of writing a business plan for your small business is that it should include your financial projections for your business.

For instance, your business plan should be able to show a projected forecast of the income and expenses of your business in the future. In particular,  it should include a projected Trading, Profit and Loss accounts and Balance Sheets of your business.

The advantage to you is that the financial projections should set standards and benchmarks against which you can compare the performance of your business.

Regular comparison of the performance of your business with set standards should enable you to identify deviations so that you can intervene to ensure that the business is always on track.

Related: How To Start Your Own Small Business

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