20 Advantage Of Creating Business Plan

Let me tell you benefits of creating a business plan – not 1, not 5 but 20 advantage of creating business plan. Some benefits are tangible some are non-tangible. However, every point is valid for a modern age entrepreneurs or business.

Most of the small business and entrepreneurs adopt ‘On the Go’ approach of business planning. Which in other words mean there is no business planning. Primary focus is on acquiring customer accompanied with cost reduction to make business profitable.

If you don’t know “What are advantage of creating business plan” OR wondering “Why to create business plan then this blog post is for you. Let me tell you benefits of creating a business plan – not 1, not 5 but 20 advantage of creating business plan. Some benefits are tangible some are non-tangible. However, every point is valid for a modern age entrepreneurs or business.

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Every time you create business plan, you are showcasing your dedication towards your business.

Especially, if you have a team working for your or deal with shareholders / investors, then this is great way of showcasing how committed you are towards your business.

Firstly, It is of paramount importance that you have a vision of a successful business. This starts with understanding of your expectations from your business. Secondly, it serves as an anchor point for your goals / milestones, how you prepare for business growth and most importantly creating readiness for future sustainability.

More aligned your business is to goals that you have set, more your business will be aligned to your expectations and driver of your vision.

Another advantage of creating business plan is that comprehensive business planning involves studying your competitors, studying their strengths and weakness and create benchmarks to evaluate your competitive standing in the market.

In Addition, picking best practices from your competition to bring in consistent and impactful improvement in the business process can become a solid strategy in creating customer delight.

A great exercise to implement this is:

– To create strategic pointers for competitors as if their business is your business

– Monitor how well can you estimate / predict their moves.

Over a time period, you’ll improve and will have strong competitive understanding as well as competitive advantage.

So, the Golden rule of sales is connecting with the right set of customers. Right Customers are congruent with your value preposition & the pay right price for the offering translating into Mega Profits. You may adopt a long term strategy or create transactional offers for short burst in sales. What ever be your strategy, you need to have solid understanding of your customer needs.

This is another important part of business plan that will facilitate your understanding of:

– Why someone should buy from you

– And in corollary if someone is not buying then why are they not buying.

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I have read about failed business cases as well as first-hand witnessed multiple times what uncovered assumptions can do to a business. When things are not clear, they are left to interpretation by individuals.

Especially when you are working alone – business scenarios will make you think differently in different dealings. As a result of which choices that you make might not be in the best interest of your business or your customers.

Undocumented assumptions are shit holes waiting for accidents to happen. Advantage of creating business plan is that with thorough business planning you can:

– Identify these assumptions 

– Address assumptions that are not so conducive for your business

– Create workflow for assumptions that may create bottleneck at later stage.

When you do business planning and background research, you expand you understanding of available biz opportunity that you are targeting.

In-depth planning will give you multiple ways to cross check the available opportunity, paving way for creating relevant goals and milestones.

With prudent planning, you’ll tweak the business model and create best ways to sell products to your customer. Be it leveraging traditional or modern retail channels, may be ecommerce or omni-channel setup.

Business planning will make you aware of forthcoming challenges, which means you can proactively create strategies to overcome challenges and mitigate biz risks.

Cash management and funding are two crucial elements of your financial management that you should be aware of. If you deal with seasonal demand or short product cycles, then it is more crucial for you to have readiness of cash / capital as per business need at the right time.

Advantage of creating business plan is that it will give you a comprehensive picture of cash as well as funding requirement for biz success at different biz stage as well as different time in a fiscal year. 

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You may go for VC funding through debt, equity , sweat equity etc, a solid business plan is a must have. It will ultimately boil down to biz idea, your vision and your clarity regarding biz metrices.

Advantage of creating business plan is that it will help you cover all the requirements for funding as well create possible scenarios to showcase true potential of your business.

You may go for VC funding through debt, equity , sweat equity etc, a solid business plan is a must have. It will ultimately boil down to biz idea, your vision and your clarity regarding biz metrices.

Comprehensive business planning will help you cover all the requirements for funding as well create possible scenarios to showcase true potential of your business.

Understanding prospects as well pressures in the business is not only crucial but a factor that controls business survival. Understanding the latest and important trends in your industry and proactively optimizing your business to leverage these will help you succeed. Knowing the competition and preparing to deal with them is necessary for existence and creating the correct product/service mix.

Another advantage of creating business plan is that it will help you to gain deep understanding of the environment in which your business is going to operate.

When you have absolute clarity about your business vision, you will be able to understand hiring what kind of people can help you realise your vision. You will be able to attract right talent and give them growth goals as well as exciting opportunities.

A business plan becomes helpful instrument in sharing your vision with mangers and leaders hired by you and establishing the fact that they have long term growth opportunity with you.

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Beauty of Long term business plan is that it serves as a road to the future. You can have clear goals & expectations from business functions and your team, which makes short  terms planning easier.

This also ensures that day- to-day business decisions are in alignment with the long terms vision for the business.

Whenever you evaluate collaborating for business synergy then Business plan works as a bridge for the involved parties to evaluate long term association. From the CFO’s point of view – business plan, business charter, and solid account books are necessary while planning for partnerships and expansion strategies.

Specially to understand your role as well as opportunity cost, business plan is a crucial document.

Your Brand story and identity are strongly influenced by your positioning strategy. When you create a business plan, you gain tremendous insights regarding your industry, regional markets, your products as well as your customer.

Above all, how you use your positioning in current & foreseeable futuristic environment will determine course to strengthen your brand.

Irrespective of how large your business is, there are functional KPIs that need to be achieved. When you implement business plans and measure variations in functional targets vs actual achieved, it tells you it your planning is in the right direction or not.

Therefore, another advantage of creating business plan is that you can also factor reasons for variations and strengthen your functional parameters.

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Business plan along with continuous and timely analysis will enable you to unhide any trends / process / factors that are working against you and make course corrections in short term.

For instance, say during tight market conditions, your sales is dipping, then you have opportunity to change tactics in short term and strengthen your operational metrices. Once situations is under control then you can start realigning tactics to move toward your long term vision.

Irrespective of your deployment of offline /online marketing strategies, you need to understand clearly that marketing budget provisioning is basis your business planning. In other words, right business plan will give you control over marketing expenses that will be used for finding, reaching, engaging, retaining your customers as per requirement of any modern age business.

Your business plan will serve as a guide for an impactful marketing strategy and allow tactical tools to accomplish the business goals.

When you are creating a business plan, it will give you forecast regarding support resources like People, IT & Automation etc. Above all, precise business planning will create visibility of resource at each growth level as well as against timeline to help relevant investment in right resources

When business plan is clubbed with customer centric model, you monitor market movements and build infrastructure to capture customer feedback. After that, when you analyse feedback and utilise this information (thru brainstorming, market analysis etc), you may uncover better ways of implementations and create new solutions for your customers.

This is highly cost effective and proactive approach for new business and process ideas.

So these were 20 advantage of creating business plan. In conclusion, we may have ‘Wishful Thinking’, it is no substitute for creating a business plan. If you need help in creating or implementing your business plan, please reach out to me using Contact Page.