In my business coaching role I know there is a heated debate regarding the merits of writing a detailed business plan. The gist of the debate is whether or not there is a benefit (financial and overall) to writing a detailed business plan, or whether this has become a dated concept and a fledgling business can thrive without one.
A recent university study suggested that a business plan has no statistical effect on the outcome or financial return of a business.
However on a general level a business plan is still necessary. It is necessary for analysis, planning and communicative purposes - but should not be expected to make drastic influences on the outcome or financial success of a company.
A business plan offers a direct and thorough explanation of the business, a step-by-step guide that incorporates all phases of building the business. As a business coach I have seen how the plan can help solidify your team and relay to your potential investors the information that they need in order to make decisions.
However dedicating time and energy to a business plan can be not only tedious, it can also prove to be a veritable challenge. A good business plan should be detailed yet succinct, and many entrepreneurs find it hard to break down their most precious concepts to a minimum. From a business coaching perspective I believe that if you can’t write your business plan as a skeleton or outline for what you hope to achieve and how you plan on doing so, you are wasting valuable time.
Writing out your plan will give you an objective and more focused view on what you are intending to carry out and how. This in-depth analysis will help you foresee potential gaps or hiccups, and help to eliminate surprise hurdles and obstacles.
It will also force you to do your much-needed market research and to really have an in-depth knowledge of your industry, resources and markets. It will also help you avoid mistakes made by competitors.
Changes will occur and plans will be adjusted - be prepared for these curve balls. Use the business plan as a marketing tool and incorporate your intentions and goals that will in turn lie out your financial options and strategies.
The word 'blueprint' is used a lot in connection with what makes a good business plan. This type of strategic analysis gives the most objective look and will both provide you and your team with guidelines and better communication, as well as appealing to potential investors with its clarity and defined intentions. In this manner, writing a business plan can benefit a successful business venture.
Incidentally, as a business coach I have a process where we can help you prepare a 2-page strategic plan that melds the benefits of a business plan with the implementation success of an action plan.