This is perhaps the most critical element of a successful business. It is also the element that many business owners neglect or spend too little time on.
Why? Because it’s a whole lot of work, and when you’re in the throes of starting a new venture, there are probably far more pressing, or glamorous and exciting, things to be doing.
Yes, finding a great space to rent can be important. And yes, figuring out what to charge customers is essential too. But if you don’t do those things within the context of the larger picture – the total business plan – you are likely to miss critical details that have the potential to doom your whole venture to failure.
Some people consider writing a business plan a necessary evil in order to get financing from a banker or investor: This can be missing the point. A business plan is far more than a fancy sales tool; it is a powerful management tool to help you focus on your goals, set objectives and avoid potential pitfalls. The process of writing a business plan forces you to consider all the aspects of starting your venture or taking it to the next stage; from identifying opportunities, to exploring risks, to putting figures to ideas.
Bottom line, the business plan makes you think, quantitatively and qualitatively, about why, what and how you are to proceed. It helps you think about the highs and the lows, the advantages and the disadvantages, the potential for success and for failure. While you might have a successful business without a business plan, it is far more likely that if you fail to plan, you will also fail to succeed.
Of course, you may find that when you look at your business idea in this detail, it simply doesn’t stack up. Disappointing as this might be, it’s far better to find this out on paper than suffer the cost and consequences of finding it out in practice