Business Plans are a waste of time!

December 8th, 2012

We always hear about the importance of a business plan but why bother – aren’t they really a waste of time? Aren’t they something that looks pretty for the bank but then goes in the bottom drawer never again to see the light of day?

If that’s the case & they aren’t used in your business then you’re right – they are probably a complete waste of time apart from a ‘earn the tick’ exercise.

In my view your business plan should be a working document for your business, guiding direction & activity & putting some weigh points in place so you know if you are on track or not. If it’s something that looks pretty but is never used again you’d be better to spend that time elsewhere.

So here are some reasons that you may develop a business plan:

 To work out if the business opportunity is actually a viable one
This could be completed in the due diligence stage when looking at a potential business opportunity. It might not be a full blown plan but will definitely allow you to decide whether you should proceed or not.

To provide a roadmap for your business
This is where you look at your business from both a strategic & operational level. The amount of detail can vary but I always believe that your plan no matter how big should eventually be able to fit on 1 page!

 To provide information for potential investors
Whether you are perhaps looking for a JV partner or new shareholder, a full business plan allows all parties to take a step back & review the business in light of any new potential structure. The new party to the relationship can assess what they are entering into & the existing party can also take this time to review if they in fact do need a new partner or not. Ideally this plan would already be in place & is only reviewed or modified in light of the new opportunity.

 To assist in securing funding
A well thought out business plan allows a lender to see that the business has considered all the ramifications of any new lending. Again the plan should already be in place & just need modifying for the lender.

The next article will outline some areas to consider in your plan.

If you would like some assistance in the business planning area don’t hesitate to contact PlanA Consulting by clicking here. Technology means that we are able to work with clients locally or remotely.

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