Why Business Plans?
Why write a business plan?
1. More companies stay in business – Studies show that companies generate higher than average profits and stay in business longer when they have a business plan that they follow.
2. You can understand what to do – Not knowing why things go wrong, why customers don’t buy or return, why your competitors are better or more respected than you is a recipe for disaster. Your plan will help you analyse your business.
3. You can allocate limited resources better – No company can do everything. You will need to prioritize the work required. Choose a few key projects to work on and you will see the results.
4. You will understand your finances – You’ll need to forecast your sales and costs. But what are they? Work all of this out with your plan.
5. Everyone is aware of your plans – You and your staff, bank manager and other interested parties all need to know the direction the company is going. This is important to pull everyone into the same direction and develop good teamwork. It also prevents some people doing things that are not priorities in your business.
Planning helps you understand your business. It can be frustrating when there are no customers about and you don’t know why.