STRATEGIC BUSINESS PLANNING

Whether it’s to provide direction to attract investors, a business plan is vital for the success of any organization.

Haven getting to know what a business plan is, as a business owner, you must also understand needed strategies to achieve all that the business plan states. Yes! A strategic business plan is utmostly beneficial for any business; it helps to know when to make use of resources, it helps pursue the target line of business.

WHAT A BUSINESS PLAN ENTAILS 

SBA.gov recommends that a good business plan should include:

• Executive summary — a snapshot of your business
• Company description — describes what you do
• Market analysis – research on your industry, market, and competitors
• Organization and management — your business and management structure
• Service or product — the products or services you’re offering
• Marketing and sales — how you’ll market your business and your sales strategy
• Funding request — how much money you’ll need for next 3 to 5 years
• Financial projections — supply information like balance sheets
• Appendix — an optional section that includes résumés and permits

REASONS FOR HAVING A BUSINESS PLAN

1. For seeking investment – If you are asking a venture capitalist, investor, or a bank for funding, they are going to want to know that you have a good handle on your small business’s trajectory. It is needless to write a 200-page document but you will need something to hand to the investor that shows that there’s a market for the problem your business solves and includes your financial statements and forecasts. Basically, your business plan should make it simple for potential partners and supporters of all kinds to understand your business model and financials. 

2. Business planning is proven to help you grow 30 percent faster –  Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The process of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and be successful. 

Business planning is about regularly setting goals, tracking your progress toward those goals, and making changes to your business as you learn more about your customers.

You don’t have to just take our word for it. Studies have proven that companies that plan and review their results regularly really do grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful statistics on businesses that fail, or that experience cash flow crises that threaten to close them down. 

3. Spending decisions will be made with confidence – These are major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions. As your business grows, some of the best problems you’ll have are figuring out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. 

4. Early critical cash flows –  The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your cash flow statement is one of the three key financial statements you’ll put together with your business plan. (The other two are your balance sheet and your income statement (P&L). 

Checking your cash flow statement regularly as part of your business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills. 

5.  It will help you set achievable goals and milestones – 

Every good business plan outlines SMART goals and milestones. SMART goals are:

• Specific
• Measurable
• Achievable
• Relevant
• Time-based

If you create a business plan but skip attaching any goals or milestones to it, it’s a lot less useful. If you set goals and milestones for your company and your team that isn’t aligned with the strategy you articulated in your business plan, you’re going to have a hard time aligning your team around the same priorities. 

RULES TO FOLLOW WHEN WRITING A BUSINESS PLAN

As part of a good strategy in business planning, you need to know how a business plan is written and the following are step-by-step procedures in writing a business plan:

1. Keep it short – Business plans should be short and concise. You want your business plan to be seen and have clarity right because no one is going to read 100 pages or even 40-page business plans so it has to be concise. Also, your business plan should be a tool you use to make your business transmogrify, something you continue to use and refine over time. An excessively long business plan is a huge hassle to revise.
2. Know your audience – You have to write your plan in line with the jargon attributed to your business ecosystem and sphere. For example, if your firm is developing Electronics i.e. gadgets as products, your potential investors won’t be cloth selling tycoons. And so, to avoid acronyms that won’t be familiar you have to understand the language of your business in order to effectively communicate to customers and potential investors
3. Don’t be intimidated – Writing a business plan may seem like a big hurdle, but it doesn’t have to be. You can know your business, you’re the expert on it. For this reason, writing a business plan and then leveraging your plan for growth won’t be as challenging as you think. 

So basically, when your business plan is well structured, it is opened to divers opportunities part of which is getting more customers and investors.