14 Apr

A DIFFERENT PERSPECTIVE ON BUSINESS PLANS

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There is a lot of information available on this subject and we agree with the often cited reasons for why a business plan is needed. We would however like to add our own perspective on the importance of these documents.

Raising of Capital or Finance

One key reason for a business plan is to attract investors or when applying for finance from a financial institution. Investors rely on business plans when making a decision to invest. Business plans should contain information that is relevant and should refrain from giving holistic information of the industry they are in.

Makes You Think About Your Business

When drafting a business plan, it requires you to put some strategic thinking into your company. Many businesses exist without specific direction. The process of compiling a business plan makes you think of key areas such sales and marketing. It sets out key objectives for short, medium and long term. It forces one to set clear milestones.

Reference for Stakeholders

A business plan sets out clearly what your objectives are and what you expect the business to do. The document should be available to your stakeholders which include your business partners, staff and certain key creditors. Also certain key clients might want to see what your objectives are and this might be a factor in determining their relationship with the company.

Revisiting Business Plans

Business plans should be reviewed every quarter. Key to the review should be the analysis of achieving budgets and objectives. If they have not been met, one should analyse why not and put together a strategy to bring the business back to its objectives.

More importantly we feel that a business plan is a powerful motivational tool. It keeps on reminding you that, even when things are tough, you have started and are doing something that is worthwhile. A business plan reminds you why you do what you do and why you did it in the first place.

We encourage our clients to read their business plan when times are tough. More often than not, the feedback is that it helped them get themselves motivated again.

 

Need a business plan? SA Business Planning is a full-service business plan development and strategic consulting firm. Visit www.sabusinessplans.co.za for more information.

 

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