How useful are Business Plans for New or Small Businesses

Business planning process

I would like to address a misconception of business plans.

Myth #1: “Business plans are a waste of time!” – I hear this a lot. People would rather get down business and just do it! Sure, I agree with Nike’s “Just Do It!” motto too, particularly when it comes to stepping out of our comfort zones into a new challenge (Note to self: We’ll cover this in another write up).

I get it when it comes to new startups, it is better to get on with a business model and go on a learning path with the business and put in tweaks around the business model, rather than getting hung up on writing a business plan. However, there will be a point in the business when you might realise that some form of business planning could be useful for the business, especially if you intend to grow the business.

The essence lies not in the business plan document itself. The fundamentals lie in the process of preparing the business plan. When we prepare a business plan for our business, we go through a certain process which requires us to take a step back and reflect what is the current state of our business, where we are heading to and how we are getting there.

When we go through the process of writing that business plan, chances are:

  • we will discover new possible business opportunities which we would otherwise may have missed
  • our weaknesses are identified and we can make decisions on these factors
  • we will be able to capitalise on our core strengths into a new business tactic

A successful business owner prepares a business plan not merely as a document to be shown to a potential investor or for loan application submission to banks. This business owner has a vision, and has a plan well prepared five to ten years in advance. This plan evolves as their business progresses. Each day, they reach closer to their mountain peak.

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