BUSINESS START UP: 5 KEY REASONS FOR DEVELOPING A BUSINESS PLAN

The need and necessity for every business to have a plan cannot be overemphasize. A business, like the ship in the waters, needs a guiding tool (a navigational compass or whatever) if it has to find its bearing to the shores.

However, too often, this all-important business tool is prepared only to enable owners source funds exclusively, thus depriving the plan of its other potential benefits.

Ignoring the power and importance of planning has led to the untimely death of so many businesses. While some see planning as time wasting, others just trust in their abilities to coordinate every business by heart. This is not to say, however that planning guarantees success of a business, rather it is a sure and dependable step towards averting and controlling unpleasant business experiences which ordinarily could lead to business collapse.
The importance and advantages of planning not just to source for fund but to grow the business is what this article seeks to address. Here are 5 essentials of planning when staring your business.

1. BUSINESS FOCUS
A business plan enables the business to concentrate on its focus in order to avoid derailment. Without a plan, the management of business will not be able to determine or discover whether or not the business is on course. But with a business plan any deviation is often easily identified and any diversionary attempts are resisted.

2. MANAGEMENT TOOL
A business plan is a key management tool for anyone organizing a business. Planning for a business is like planning for a house. A house without a plan will be built but not according to specifications. The idea of what the business will do and how it will look like are all contained in the business plan. You can only know if you have the right business when you compare what you have with what you planned.

3. ACHIEVING REVENUE TARGET
A business plan also helps businesses realize their revenue targets. If for instance, a business targeted monthly revenue is N500,000 and as at the 20th day of the month, half of the revenue is not generated, the availability of a plan will indicate this fall and the business efforts will be geared up to meet up with the monthly targeted figure. Plans, hence, do not only control your expenditure, but also the activities that control your revenue.

4. RAISING CAPITAL
A business plan is also very important in the raising of business capital. It is one of the major prerequisite for the granting of a facility by banks and other financiers. Why your financiers had refused granting you a loan may be because questions like: “what is the loan for? What will you make out of it? How will you refinance the loan? etc.” were not contained or convincingly answered in your business plan.

5. CONTINUITY
The vision for every business is for it to last forever but not with its staff. Should the management of a business be changed for whatever reason, the availability of a business plan informs the new management on how to implement the projects to achieve the original goals set by its former management. But without a plan, each management is likely to have different goals and policies, creating diversion and derailment from the original goals. These changes might result in the eventual failure of the business.

CONCLUSION
If you don’t have a business plan now ensure that you have one for the sake of your investment because without it, you are very likely going to make very costly mistakes, the correction of which will mean incurring extra cost.
To know how to grow and manage your small investment/business, you can contact us on info@cash4naija.com or through our facebook page www.facebook.com/cash4naija


<<< Return Back