3 Reasons To Have A Professional Business Plan (And How To Develop One)
Owning a business can be a simple process, the magic ingredient is consistent effort. It all begins with understanding what you are selling better than anyone else. The business plan is a necessary tool that assists an entrepreneur determine what they want to do, how they want to do it and why it will be profitable. A business plan is a document presenting sensible information about how and why to sell a product/service. Having a business plan is necessary for an entrepreneur that’s new to the field or for an experienced business owner. Whether your one year goal is to increase revenue or grow within South Africa’s complex economic climate, a business plan should be your first step. Use a business plan as a tool to plan and develop strategy for success.
If you are in the entrepreneurial space then you SHOULD have heard or even had those questions posed to you. It may be that you struggled to answer them, in which case this read is for you. This article focusses on the importance of drafting a business plan. A professional business plan may help shed light on what you need to present to potential investors while assisting you identify a way forward as a business owner.
The idea behind drafting a business plan is to adequately articulate a strategy, a way to make sure that whatever product/service you intend selling gets to those clients dying to consume your product. One can only do this if all your thoughts are structured/concise/clear and on paper. Writing down ideas on a piece of paper looks very different to the dream-bubbles floating around in your head. Here, we pose four benefits/necessities for drafting a business plan. Don’t forget to download the free professional business plan template to kick start your business success.
1.Better Understanding – your business
2.Clarity on Service Offering
3.Research – strategy
4.Connect to the Investor
1.Better Understanding – your business
To make sense-full decisions for a business, one needs an external, objective opinion. The process begins with writing on paper what it is that you aim to do as an entrepreneur. Knowing what you plan to sell and why is crucial to ascertain the legitimacy and relevance of your product or service. You should be able to clearly define/list what your business objectives are.
Even if you are selling home made koeksisters or providing a baby sitting service to your neighbours, there is an objective running around in your mind. What is that objective? That objective could be to make a certain amount of money within a time frame or it could be to increase the amount of clients you currently have committed to your product/service.
Drafting a business plan will methodically solve the ‘how to’ achieve goals. The ‘How to’ is what business savvy people call strategy. Strategy is the method of identifying problems and actively finding ways to solve these problems. For example, selling hot koeksisters that people would enjoy more might not be feasible if you attempt selling on the side of the road. You know that people would rather have them at a coffee shop close by. Making the koeksistrs and spreading love with koeksisters across the world is easy but getting it to the right people may be the problem. A business plan can assist with figuring out that maybe you should approach the coffee shop down the road and supply them with a daily few dozen of koeksisters.
2.Clarity on Service Offering
Clarity is important for entrepreneurs or businesses wishing to grow. Knowing what you sell, differentiating yourself effectively in the market requires clarity most of all from you as the entrepreneur. For clients to Cleary identify what it is that you are offering, you as the business owner need to know that first.
Knowing what you will sell is a crucial step in not just creating a process to market but affects many other aspects of your business. Some of which include, cost-factors, determining overheads leading one to concluding a reasonable sale price for your product/service that makes sense to your customers ensuring you a profit.
3.Research – strategy
Reality check is that a business can only be successful by providing the market something that the market wants/needs. This can only be determined if you have done your homework and adequately conducted market research. Market research is information, a key proponent of the entrepreneurial space. The more information a business developer has the more informed decisions can be. Identifying a couple of things are crucial here:
- Who are you selling to?
- What do they want?
- Where are they?
- How will they know what you are selling?
4.Connect to the Investor
If funding is what you are looking for then a professional business plan is your first point of departure. South Africa currently has the spotlight out for innovative businesses/entrepreneurs. Funders and investors are around and can be found, but should only be approached with a full-proof-no-leak business plan. Investors/funders require legitimate financial forecasts but still remain people. Use your business plan to appeal to the human-being in your investor. Present a potential investor the opportunity to be confident in the potential of your product/service. Allow them the chance to trust that you know what you are doing and know how to lead your business to success. A business plan is a constructive way to articulate and organise strategy for success, one that an investor can acknowledge and believe in.
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