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14 Reasons Why You Need a Business Plan

10 min. read

Updated May 10, 2024

There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.

A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.

A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.

Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?

Good questions. Here’s every reason why you need a business plan.

• 1. Business planning is proven to help you grow 30 percent faster

Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The  process  of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed. 

You don’t have to just take our word for it. Studies have  proven that companies that plan  and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience  cash flow crises  that threaten to close them down. 

• 2. Planning is a necessary part of the fundraising process

One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.

Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture. 

A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality. 

Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money. 

• 3. Having a business plan minimizes your risk

When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations. 

As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can  do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans. 

Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.

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• 4. Crafts a roadmap to achieve important milestones

A business plan is like a roadmap for your business. It helps you set, track and reach business milestones. 

For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.

In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.

And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.

• 5. A plan helps you figure out if your idea can become a business

To turn your idea into reality, you need to accurately assess the feasibility of your business idea.

You need to verify:

• If there is a market for your product or service
• Who your target audience is
• How you will gain an edge over the current competition
• If your business can run profitably

A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.

Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.

6. You’ll make big spending decisions with confidence

As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. 

These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.

7. You’re more likely to catch critical cash flow challenges early

The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your  cash flow statement  is one of the three key financial statements you’ll put together for your business plan. (The other two are your  balance sheet  and your  income statement  (P&L). 

Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills. 

• 8. Position your brand against the competition

Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:

• What is your competition doing well? What are they doing poorly?
• What can you do to set yourself apart?
• What can you learn from them?
• How can you make your business stand out?
• What key business areas can you outcompete?
• How can you identify your target market?

Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete. 

• 9. Determines financial needs and revenue models

A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind. 

Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business. 

Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.

• 10. Helps you think through your marketing strategy

A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers. 

Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc. 

Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.

• 11. Clarifies your vision and ensures everyone is on the same page

In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there. 

Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.

• 12. Future-proof your business

A business plan helps you to evaluate your current situation and make realistic projections for the future.

This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.

Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.

By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.

You’ll also be in a better position to seize opportunities as they arise.

Further Reading: 5 fundamental principles of business planning

• 13. Tracks your progress and measures success

An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.

By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.  

Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.

• 14. Your business plan is an asset if you ever want to sell

Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale. 

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• Writing your business plan

By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one. 

Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools and business plan templates out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• 6. You’ll make big spending decisions with confidence
• 7. You’re more likely to catch critical cash flow challenges early

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The importance of a business plan

Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.

Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.

What is a business plan?

A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.

Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success. ‍

Why is a business plan important?

A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.

Business plans typically include detailed information that can help improve your business’s chances of success, like:

• A market analysis : gathering information about factors and conditions that affect your industry
• Competitive analysis : evaluating the strengths and weaknesses of your competitors
• Customer segmentation : divide your customers into different groups based on specific characteristics to improve your marketing
• Marketing: using your research to advertise your business
• Logistics and operations plans : planning and executing the most efficient production process
• Cash flow projection : being prepared for how much money is going into and out of your business
• An overall path to long-term growth

What is the purpose of a business plan?

A business plan is like a map for small business owners, showing them where to go and how to get there. Its main purposes are to help you avoid risks, keep everyone on the same page, plan finances, check if your business idea is good, make operations smoother, and adapt to changes. It's a way for small business owners to plan, communicate, and stay on track toward their goals.

10 reasons why you need a business plan

I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.

The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.

To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.

1. To help you with critical decisions

The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.

Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.

Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.

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2. To iron out the kinks

Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.

3. To avoid the big mistakes

Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.

According to data from CB Insights , some of the most common reasons businesses fail include:

• No market need : No one wants what you’re selling.
• Lack of capital : Cash flow issues or businesses simply run out of money.
• Inadequate team : This underscores the importance of hiring the right people to help you run your business.
• Stiff competition : It’s tough to generate a steady profit when you have a lot of competitors in your space.
• Pricing : Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.

The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!

Get a jumpstart on your business plan by creating your own cash flow projection .

4. To prove the viability of the business

Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.

Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.

A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.

Want to prove there’s a market gap? Here’s how you can get started with market research.

5. To set better objectives and benchmarks

Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.

6. To communicate objectives and benchmarks

Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.

Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.

7. To provide a guide for service providers

Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.

8. To secure financing

Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.

Learn what you need to get a small business loan.

9. To better understand the broader landscape

No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.

10. To reduce risk

Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.

Business plan FAQs

How does having a business plan help small business owners make better decisions.

Having a business plan supports small business owners in making smarter decisions by providing a structured framework to assess all parts of their businesses. It helps you foresee potential challenges, identify opportunities, and set clear objectives. Business plans help you make decisions across the board, including market strategies, financial management, resource allocation, and growth planning.

What industry-specific issues can business plans help tackle?

Business plans can address industry-specific challenges like regulatory compliance, technological advancements, market trends, and competitive landscape. For instance, in highly regulated industries like healthcare or finance, a comprehensive business plan can outline compliance measures and risk management strategies.

How can small business owners use their business plans to pitch investors or apply for loans?

In addition to attracting investors and securing financing, small business owners can leverage their business plans during pitches or loan applications by focusing on key elements that resonate with potential stakeholders. This includes highlighting market analysis, competitive advantages, revenue projections, and scalability plans. Presenting a well-researched and data-driven business plan demonstrates credibility and makes investors or lenders feel confident about your business’s potential health and growth.

Understanding the importance of a business plan

Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.

Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.

Related Posts

Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.

The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.

Do you REALLY need a business plan?

The top three questions that I get asked most frequently as a professional business plan writer will probably not surprise you:

• What is the purpose of a business plan – why is it really required?
• How is it going to benefit my business if I write a business plan?
• Is a business plan really that important – how can I actually use it?

Keep reading to get my take on what the most essential advantages of preparing a business plan are—and why you may (not) need to prepare one.

The importance, purpose and benefit of a business plan is in that it enables you to validate a business idea, secure funding, set strategic goals – and then take organized action on those goals by making decisions, managing resources, risk and change, while effectively communicating with stakeholders.

Let’s take a closer look at how each of the important business planning benefits can catapult your business forward:

1. Validate Your Business Idea

The process of writing your business plan will force you to ask the difficult questions about the major components of your business, including:

• External: industry, target market of prospective customers, competitive landscape
• Internal: business model, unique selling proposition, operations, marketing, finance

Business planning connects the dots to draw a big picture of the entire business.

And imagine how much time and money you would save if working through a business plan revealed that your business idea is untenable. You would be surprised how often that happens – an idea that once sounded so very promising may easily fall apart after you actually write down all the facts, details and numbers.

While you may be tempted to jump directly into start-up mode, writing a business plan is an essential first step to check the feasibility of a business before investing too much time and money into it. Business plans help to confirm that the idea you are so passionate and convinced about is solid from business point of view.

Take the time to do the necessary research and work through a proper business plan. The more you know, the higher the likelihood that your business will succeed.

2. Set and Track Goals

Successful businesses are dynamic and continuously evolve. And so are good business plans that allow you to:

• Priorities: Regularly set goals, targets (e.g., sales revenues reached), milestones (e.g. number of employees hired), performance indicators and metrics for short, mid and long term
• Accountability: Track your progress toward goals and benchmarks
• Course-correction: make changes to your business as you learn more about your market and what works and what does not
• Mission: Refer to a clear set of values to help steer your business through any times of trouble

Essentially, business plan is a blueprint and an important strategic tool that keeps you focused, motivated and accountable to keep your business on track. When used properly and consulted regularly, it can help you measure and manage what you are working so hard to create – your long-term vision.

As humans, we work better when we have clear goals we can work towards. The everyday business hustle makes it challenging to keep an eye on the strategic priorities. The business planning process serves as a useful reminder.

3. Take Action

A business plan is also a plan of action . At its core, your plan identifies where you are now, where you want your business to go, and how you will get there.

Planning out exactly how you are going to turn your vision into a successful business is perhaps the most important step between an idea and reality. Success comes not only from having a vision but working towards that vision in a systematic and organized way.

A good business plan clearly outlines specific steps necessary to turn the business objectives into reality. Think of it as a roadmap to success. The strategy and tactics need to be in alignment to make sure that your day-to-day activities lead to the achievement of your business goals.

4. Manage Resources

A business plan also provides insight on how resources required for achieving your business goals will be structured and allocated according to their strategic priority. For example:

Large Spending Decisions

• Assets: When and in what amount will the business commit resources to buy/lease new assets, such as computers or vehicles.
• Human Resources: Objectives for hiring new employees, including not only their pay but how they will help the business grow and flourish.
• Business Space: Information on costs of renting/buying space for offices, retail, manufacturing or other operations, for example when expanding to a new location.

Cash Flow It is essential that a business carefully plans and manages cash flows to ensure that there are optimal levels of cash in the bank at all times and avoid situations where the business could run out of cash and could not afford to pay its bills.

Revenues v. Expenses In addition, your business plan will compare your revenue forecasts to the budgeted costs to make sure that your financials are healthy and the business is set up for success.

5. Make Decisions

Whether you are starting a small business or expanding an existing one, a business plan is an important tool to help guide your decisions:

Sound decisions Gathering information for the business plan boosts your knowledge across many important areas of the business:

• Industry, market, customers and competitors
• Financial projections (e.g., revenue, expenses, assets, cash flow)
• Operations, technology and logistics
• Human resources (management and staff)
• Creating value for your customer through products and services

Decision-making skills The business planning process involves thorough research and critical thinking about many intertwined and complex business issues. As a result, it solidifies the decision-making skills of the business owner and builds a solid foundation for strategic planning , prioritization and sound decision making in your business. The more you understand, the better your decisions will be.

Planning Thorough planning allows you to determine the answer to some of the most critical business decisions ahead of time , prepare for anticipate problems before they arise, and ensure that any tactical solutions are in line with the overall strategy and goals.

If you do not take time to plan, you risk becoming overwhelmed by countless options and conflicting directions because you are not unclear about the mission , vision and strategy for your business.

6. Manage Risk

Some level of uncertainty is inherent in every business, but there is a lot you can do to reduce and manage the risk, starting with a business plan to uncover your weak spots.

You will need to take a realistic and pragmatic look at the hard facts and identify:

• Major risks , challenges and obstacles that you can expect on the way – so you can prepare to deal with them.
• Weaknesses in your business idea, business model and strategy – so you can fix them.
• Critical mistakes before they arise – so you can avoid them.

Essentially, the business plan is your safety net . Naturally, business plan cannot entirely eliminate risk, but it can significantly reduce it and prepare you for any challenges you may encounter.

7. Communicate Internally

Attract talent For a business to succeed, attracting talented workers and partners is of vital importance.

A business plan can be used as a communication tool to attract the right talent at all levels, from skilled staff to executive management, to work for your business by explaining the direction and growth potential of the business in a presentable format.

Align performance Sharing your business plan with all team members helps to ensure that everyone is on the same page when it comes to the long-term vision and strategy.

You need their buy-in from the beginning, because aligning your team with your priorities will increase the efficiency of your business as everyone is working towards a common goal .

If everyone on your team understands that their piece of work matters and how it fits into the big picture, they are more invested in achieving the objectives of the business.

It also makes it easier to track and communicate on your progress.

Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.

8. Communicate Externally

Alliances If you are interested in partnerships or joint ventures, you may share selected sections of your plan with the potential business partners in order to develop new alliances.

Suppliers A business plan can play a part in attracting reliable suppliers and getting approved for business credit from suppliers. Suppliers who feel confident that your business will succeed (e.g., sales projections) will be much more likely to extend credit.

In addition, suppliers may want to ensure their products are being represented in the right way .

Professional Services Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, including attorneys, accountants, and other professional consultants as needed, to make sure that everyone is on the same page.

Advisors Share the plan with experts and professionals who are in a position to give you valuable advice.

Landlord Some landlords and property managers require businesses to submit a business plan to be considered for a lease to prove that your business will have sufficient cash flows to pay the rent.

Customers The business plan may also function as a prospectus for potential customers, especially when it comes to large corporate accounts and exclusive customer relationships.

9. Secure Funding

If you intend to seek outside financing for your business, you are likely going to need a business plan.

Whether you are seeking debt financing (e.g. loan or credit line) from a lender (e.g., bank or financial institution) or equity capital financing from investors (e.g., venture or angel capital), a business plan can make the difference between whether or not – and how much – someone decides to invest.

Investors and financiers are always looking at the risk of default and the earning potential based on facts and figures. Understandably, anyone who is interested in supporting your business will want to check that you know what you are doing, that their money is in good hands, and that the venture is viable in the long run.

Business plans tend to be the most effective ways of proving that. A presentation may pique their interest , but they will most probably request a well-written document they can study in detail before they will be prepared to make any financial commitment.

That is why a business plan can often be the single most important document you can present to potential investors/financiers that will provide the structure and confidence that they need to make decisions about funding and supporting your company.

Be prepared to have your business plan scrutinized . Investors and financiers will conduct extensive checks and analyses to be certain that what is written in your business plan faithful representation of the truth.

10. Grow and Change

It is a very common misconception that a business plan is a static document that a new business prepares once in the start-up phase and then happily forgets about.

But businesses are not static. And neither are business plans. The business plan for any business will change over time as the company evolves and expands .

In the growth phase, an updated business plan is particularly useful for:

Raising additional capital for expansion

• Seeking financing for new assets , such as equipment or property
• Securing financing to support steady cash flows (e.g., seasonality, market downturns, timing of sale/purchase invoices)
• Forecasting to allocate resources according to strategic priority and operational needs
• Valuation (e.g., mergers & acquisitions, tax issues, transactions related to divorce, inheritance, estate planning)

Keeping the business plan updated gives established businesses better chance of getting the money they need to grow or even keep operating.

Business plan is also an excellent tool for planning an exit as it would include the strategy and timelines for a transfer to new ownership or dissolution of the company.

Also, if you ever make the decision to sell your business or position yourself for a merger or an acquisition , a strong business plan in hand is going to help you to maximize the business valuation.

Valuation is the process of establishing the worth of a business by a valuation expert who will draw on professional experience as well as a business plan that will outline what you have, what it’s worth now and how much will it likely produce in the future.

Your business is likely to be worth more to a buyer if they clearly understand your business model, your market, your assets and your overall potential to grow and scale .

Related Questions

Business plan purpose: what is the purpose of a business plan.

The purpose of a business plan is to articulate a strategy for starting a new business or growing an existing one by identifying where the business is going and how it will get there to test the viability of a business idea and maximize the chances of securing funding and achieving business goals and success.

Business Plan Benefits: What are the benefits of a business plan?

A business plan benefits businesses by serving as a strategic tool outlining the steps and resources required to achieve goals and make business ideas succeed, as well as a communication tool allowing businesses to articulate their strategy to stakeholders that support the business.

Business Plan Importance: Why is business plan important?

The importance of a business plan lies in it being a roadmap that guides the decisions of a business on the road to success, providing clarity on all aspects of its operations. This blueprint outlines the goals of the business and what exactly is needed to achieve them through effective management.

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What is a Business Plan and Why is it Important?

What is a business plan.

Whether you’re starting a small business or exploring ways to expand an existing one, a business plan is an important tool to help guide your decisions. Think of it as a roadmap to success, providing greater clarity on all aspects of your business, from marketing and finance to operations and product/service details.

While some owners may be tempted to jump directly into startup mode, writing a business plan is a crucial first step for budding entrepreneurs to check the viability of a business before investing too much time or money. The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results.

In fact, businesses that plan grow 30% faster than those that don’t. 1

For existing small businesses, a business plan should be updated annually as a way to guide growth and navigate the expansion into new markets.

Studies show that nearly 71% of the fastest-growing businesses have business plans, indicating that even existing businesses can benefit from updating their plans. 2

Your plan should include explicit objectives for hiring new employees , market analysis, financial projections, and potential investors. The objectives should indicate how they’ll help your business prosper and grow.

Building an asset management business plan

Committing resources to capital improvements and new assets such as computers, software or cars/trucks is never an easy decision for budget-conscious small business owners. But a business plan can bring clarity to the process of whether to buy or lease and help determine the optimal amount allocated to those assets. A good business plan can also help you decide if it’s feasible to take on additional office, retail or work space.

Creating a marketing strategy

Marketing and market potential are important aspects of a plan for aspiring small businesses.

Getting your business in front of customers on a consistent basis is one of the keys to ensuring your business not only stays afloat but also thrives.

Marketing strategies can be simple, but before you decide on how you will get the word out, getting clear on your target audience and why your business solves their problem can make sticking to your marketing plan easier.

Knowing your unique market positioning can help you determine your messaging. Your marketing strategy should include who your target audience is, the platforms or methods you will connect with them on, and a measurement framework to determine if your efforts are working.

Take entrepreneur Scott Sultzer, who opened Sandwich Joint restaurant in downtown Los Angeles in 2009. “I included the potential marketing demographic of all those who lived in a certain area of the city,” he said of his marketing strategy. “My goal was to capture a certain percentage of all those people who lived and worked nearby.” 4

Created primarily as a marketing tool, Sulzer’s 10-page plan included such topics as target market breakdown, marketing strategy and market penetration. “My business plan was mostly about market projections,” he said. “How are we going to get those people that lead to an increase in our daily sales? And how are we going to reach them to let them know we’re here?” 4

Depending on your business, it’s important to have both brick-and-mortar marketing strategies as well as a plan for marketing your business online .

Seeking investment for your business

In addition to providing a roadmap for progress and a marketing plan , your business plan could also be important in securing funding .

Whether you’re seeking a credit line from a bank or an influx of capital from investors, a business plan that answers questions about profitability and revenue generation can make the difference between whether someone decides to invest – or how much they might choose to invest.

In fact, a study showed that businesses with a plan were more likely to receive formal financial support, such as funding, than businesses without one. 3

Hiring the right talent

A business plan may also be needed to retain other professional services as well, such as attorneys, landlords, consultants or accountants. Sulzer used his business plan to secure a lease.

“I had to have a viable document that they could trust,” said Sulzer, who leased from one of the largest landowners in downtown Los Angeles. 4

“With a corporate landlord, they wouldn’t deal with me unless I had a business plan. I had to submit all my information and a plan that presented what I wanted to do, with financial breakdowns and percentages, demographics, and how I was going to get customers.” 4

For a small business to succeed, attracting talented workers and partners is of vital importance. A part of a business plan for hiring employees is to help bring in the right talent, from the executive level to skilled staff, by showing them the direction and growth potential of the business. It can also help secure vendor accounts, especially with exclusive suppliers.

Setting business plan objectives for management

Finally, a business plan can be important in providing structure and management objectives to a small business. It can become a reference tool to keep management on track with sales targets and operational milestones. When used properly and consulted regularly, it can help you measure and manage what you’re working so hard to create.

Ready to take the next step? Learn how to write a business plan .

Don’t forget to consider insurance coverage in your business plan. When the unexpected happens, you want to make sure your small business is covered. Customized insurance solutions are crucial to protecting and keeping your operation going.

Find out how small business insurance from Nationwide can help you build and protect your business whether you are just starting up or already established.

1 https://www.effectuation.org/wp-content/uploads/2017/06/The-Multiple-Effects-of-Business-Planning-onNew-Venture-Performance-1.pdf , Accessed October 2021. 2 https://onlinelibrary.wiley.com/doi/abs/10.1111/0447-2778.00006 , Accessed October 2021. 3 https://www.tandfonline.com/doi/abs/10.1080/13504851.2014.967377 , Accessed October 2021. 4 Nationwide Interview with Scott Sultzer, 2016.

Disclaimer: The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Nationwide Mutual Insurance Company, its affiliates and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided. Nationwide, Nationwide is on your side, and the Nationwide N and Eagle are services marks of Nationwide Mutual Insurance Company. © 2021 Nationwide.

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What is Business Plan? Importance, Setting Goals & Objective, Process, Format, Fails

• Post last modified: 14 March 2024
• Reading time: 27 mins read
• Post category: Entrepreneurship

What is Business Plan?

A business plan is an operating document that describes the dream of an entrepreneur with the objectives and plans to achieve them. A business plan shows the viability of the business idea from every aspect. A business plan is a crucial document that is utilized by both the company’s external and internal audiences.

A business plan seeks investment and it is reviewed and revised regularly to see whether goals are accomplished. A fresh business plan is sometimes written for an existing company that has opted to take a different path.

Table of Content

• 1 What is Business Plan?
• 2 Importance of Business Plan
• 3.1 Business Goals Vs. Business Objectives
• 3.2 How to Set Short-term Business Goals?
• 4.1.1 Determine Your Strategic Position
• 4.1.2 Prioritise Objectives
• 4.1.3 Develop a Plan
• 4.1.4 Execute and Manage the Plan
• 4.1.5 Review and Revise the Plan
• 5.1 Section 1: Executive Summary
• 5.2 Section 2: Industry Overview
• 5.3 Section 3: Market Analysis and Competition
• 5.4 Section 4: Sales and Marketing Plan
• 5.5 Section 5: Management Plan
• 5.6 Section 6: Operating Plan
• 5.7 Section 7: Financial Plan
• 5.8 Section 8: Appendices and Exhibits
• 6.1 Lack of planning
• 6.2 Leadership failure
• 6.3 No differentiation
• 6.4 Ignoring customer needs
• 6.5 Inability to learn from failure
• 6.6 Poor management
• 6.7 Lack of capital
• 6.8 Premature scaling
• 6.9 Poor location
• 6.10 Lack of profit

Importance of Business Plan

Let us discuss the importance of a business plan.

• It explains the vision and goals of the founder.
• It acts as a guide for the new entrepreneur.
• It serves as a blueprint for a company’s overall operation. Sales, expenditures, periods, and strategic direction can all be used to gauge a company’s success and progress.
• It may also assist an entrepreneur or management in identifying and focusing on possible areas both inside and outside the organization. Proposed remedies and contingency plans can be integrated into the company’s strategy once potentially difficult areas have been identified.
• It covers the marketing opportunities and future funding requirements, which demand managerial attention.
• In certain cases when an entrepreneur decides to transform a cherished pastime into a home-based business, the business plan can be as short as a one- or two-page document. A company’s proposal with substantial intricacy and financial ramifications, on the other hand, should have a far more detailed plan.

Setting Goals and Objectives

Business objectives are an important component of creating priorities and positioning an organization for long-term success. Setting company goals and developing separate targets to assist in achieving each goal will considerably improve the capacity to attain those goals. Here, we look at how to define company goals, the distinction between business goals and objectives, and examples of short- and long-term business goals.

Business objectives may be defined for a whole organization as well as specific departments, employees, managers, and clients. Goals are usually used to symbolize a company’s wider purpose and provide an end goal for personnel to work toward. Business objectives may not need to be precise or have well-defined activities. Business objectives, on the other hand, are broad results that a company aims to attain.

Business objectives are measures taken to achieve a company’s larger goals that are clearly stated and quantifiable. Objectives are particular and they are simple to establish and track. To fulfill their business objectives, companies must set objectives.

Business Goals Vs. Business Objectives

The distinction between business goals and business objectives is as follows:

• Business objectives establish the “how” of a company’s purpose, whereas business goals define the “what.”
• Business objectives specify concrete tasks, whereas business goals often merely give a broad direction for a firm to pursue.
• Business objectives are usually measurable, whereas business goals are not.
• Business objectives are more detailed, whereas business goals are more wide and inclusive.
• Business objectives are usually time-bound, whereas business goals are not.

How to Set Short-term Business Goals?

Short-term business objectives are those that you wish to attain in the next few weeks or months for a firm. When it comes to short-term business goals, you may take the following steps:

• Recognize the Short-term Business Goals of the Company for A Set period : In this step, short-term objectives of the company are established so that the set objective can be accomplished in a specific time frame. Many short-term goals are secondary to the fulfillment of long-term objectives. Consider your long-term objectives as well as what you want to achieve in the coming weeks or months and turn them into short-term objectives that will help your company grow.
• Break Goals Into Actionable Business Objectives: Here, management breaks the goals into specific targets. These goals should be represented by the measures an organization will take to achieve them. For example, the target for Kalyani is to convert 5 leads and get 5 new customers for the business within the next 2 months, objectives will be the job or work done for getting 5 customers’ such as placing a new advertisement in the newspaper, social media and posting three times a week on YouTube and Instagram.
• Objectives Should Be Measurable: The established business goals should be quantifiable or measurable. For example, if an employee has the short-term goal of posting an advertisement or banner on social media then, do not assign responsibility to him/her by just saying “post more and more on social media”. Instead, give him/her a per-day target to make it quantifiable or measurable. For example “Post on Instagram three times a week and Facebook two times a week for eight weeks,”.
• Goal-related Tasks Must Be Assigned to Employees: Once the objectives for each short-term goal have been determined, assign each one to an individual or team of employees who will see it through to completion.
• Check and Keep a Record of Performance regularly: Measure your short-term goals’ progress regularly to verify you are on pace to fulfill them within the timeframe you set. Measure any additional customer/potential customer contact you receive as a result of increasing your social media postings to three times a week as part of a business objective. Keep track of progress and, if necessary, change your targets to better fulfill your objectives.

Process of Writing the Business Plan

Every company should have a strategic plan, but you might be surprised by the number of companies that try to function without one (or at least one that is well expressed). According to Strategy research, 86 percent of executive teams spend less than one hour per month discussing strategy, while 95 percent of the average worker has no idea what their company’s strategy is. Because so many firms fail in these areas, strategic planning can help you get ahead of the game.

The strategic planning process is more comprehensive; it aids in the creation of a roadmap for which strategic objectives you should focus on and which projects will be less beneficial to the company. The phases of the strategic planning process are listed below.

Strategic Planning Process

Determine your strategic position.

This phase of preparation sets the tone for the rest of the project. To figure out where you need to go and how you will get there, you must first figure out where you are. Include the appropriate stakeholders from the start, taking into account both the internal and the external sources.

Identify significant strategic concerns by speaking with corporate management, gathering consumer feedback, and gathering industry and market data to acquire a comprehensive picture of your position in the market and the thoughts of your customers.

It is better to write a good idea, purpose, and vision statement for the company to get a clear picture of what success looks like. Additionally, you should analyze your firm’s basic principles to remind yourself of how your organization will achieve these goals.

To begin, identify the challenges that need to be solved using industry and market data, including consumer insights and current/future requests. Create a list of your company’s internal strengths and weaknesses, as well as external possibilities (ways your company may develop to meet requirements that the market doesn’t currently meet) and threats (your competition).

Use a SWOT diagram as a foundation for your initial analysis. You may easily classify your results as Strengths, Weaknesses, Opportunities, and Threats or SWOT to define your present position with input from executives, customers, and external market data.

Political, Economic, Socio-cultural, and Technological or PEST is a strategic technique for identifying dangers and possibilities for your company.

Prioritise Objectives

After you have determined your present market position, you will need to set targets to assist you reach your objectives. Your goals should be in sync with the mission and vision of your firm.

Ask important questions to help you prioritize your goals, such as:

• Which of these measures will have the biggest impact on attaining our company’s mission/vision and strengthening our market position?
• What are the most critical sorts of effects (e.g., client acquisition vs. revenue)?
• What will the competition’s response be?
• Which projects are the most critical?
• What will we have to do to achieve our objectives?
• How will we track our progress and see if we have met our objectives?

To assist you in achieving your long-term strategic goals and activities stated in step one, objectives should be unique and quantifiable. Updated website content, improved email open rates and new leads in the pipeline are all possible goals.

SMART goals may help you set a schedule and identify the resources you will need to reach your objectives, as well as track your progress with key performance indicators or KPIs.

Develop a Plan

Now is the time to develop a strategic strategy for achieving your objectives. This phase entails deciding the techniques required to achieve your goals, as well as establishing a timeframe and communicating responsibilities.

Strategy maps, which work from the top down, make it straightforward to see company processes and find areas for development.

True strategic decisions generally entail a cost-of-opportunity trade-off. For example, your organization could opt to spend less money on customer service to put more money into producing an intuitive user experience. Prepare to say “no” to efforts that will not improve your long-term strategic position, based on your values, mission statement, and defined priorities.

Execute and Manage the Plan

You are now ready to put your strategy into action. To begin, share necessary material with the organization to convey the plan. After that, the real job begins. By mapping your processes, you can turn your overall strategy into a tangible plan.

To communicate team roles, use KPI dashboards. The completion process and ownership for each stage of the journey are depicted in this detailed method. Establish frequent evaluations with individual contributors and their supervisors, as well as check-in points, to ensure you stay on track.

Review and Revise the Plan

The plan’s last step, review, and revision, allows you to examine your goals and make course corrections based on past successes and failures. Determine the KPIs your team has met and how you can continue to fulfill them every quarter, changing your plan as needed.

It is critical to assess your goals and strategic position every year to ensure that you stay on course for long-term success. Balanced scorecards can help you keep track of your progress and achieve strategic goals by giving you a complete picture of your company’s performance.

Your goal and vision may need to evolve; an annual assessment is an excellent time to examine such changes, draft a new strategy, and re-implement it.

Typical Business Plan Format and Content

Here is a simple template that any company may use to create a business plan:

Section 1: Executive Summary

• Give an overview of the company’s mission.
• Describe the product and/or service offerings of the firm.
• Give a brief overview of the target market’s demographics.
• Explain how the firm will gain a piece of the available market by summarising the industry competition.
• Provide an overview of the operations strategy, including inventory, office and labor requirements, and equipment needs.

Section 2: Industry Overview

• Describe the company’s industry position.
• Describe the industry’s current competitiveness and significant players.
• Provide details on the industry in which the company will operate, projected revenues, industry trends, government influences, and the demographics of the target market.

Section 3: Market Analysis and Competition

• Define your target market, their requirements, and their location.
• Describe the market’s size, the number of units of the company’s products that potential consumers might buy, and any market changes that might occur as a result of broader economic developments.
• Give a summary of the projected sales volume in comparison to what your rivals sell.
• Give an outline of how the firm intends to compete with current competitors to achieve and maintain market share.

Section 4: Sales and Marketing Plan

• Describe the company’s items for sale as well as its unique selling proposition.
• List the many advertising outlets that the company will utilize to communicate with clients.
• Describe how the company intends to price its items so that it can earn a profit.
• Give specifics on how the company’s items will be delivered and shipped to the target market.

Section 5: Management Plan

• Describe the company’s organizational structure.
• Make a list of the company’s owners and their ownership percentages.
• Make a list of the top executives, their responsibilities, and their pay.
• List any internal and external professionals the organization intends to recruit, as well as their salaries.
• If available, include a list of the advisory board members.

Section 6: Operating Plan

• Describe the business’s location, including the need for an office and a warehouse.
• Describe the company’s workforce requirements. Outline the number of employees the firm need, their jobs, the skills training that will be required, and the length of time that each person will be with the organization (full-time or part-time).
• Describe the manufacturing process and how long one unit of a product will take to make.
• Describe equipment and machinery requirements, as well as whether the firm will lease or buy the equipment and machinery, as well as the estimated expenses.
• Provide a list of raw material needs, as well as how they will be procured and the primary vendors that will provide the necessary inputs.

Section 7: Financial Plan

• Include the projected income statement, projected cash flow statement, and projected balance sheet projection in your description of the company’s financial predictions.

Section 8: Appendices and Exhibits

• Lease quotes for buildings and machinery
• Plan for offices and warehouses that has been proposed
• An overview of the target market and market research
• The owners’ credit information
• Product and/or service list

Understand Why Business Plans Fail

The saddest aspect of a failing firm is that the owner is frequently completely oblivious to what is going on until it is too late. It makes sense because if the entrepreneur had truly understood what he/she was doing incorrectly, he/she may have been able to rescue the company.

The following is a list of some of the most common causes:

Lack of planning

Businesses fail due to a lack of both short- and long-term planning. The business strategy should address where a company will be in the coming months and years. Quantifiable objectives and outcomes and specific to-do lists with dates and deadlines will be included in the correct plan. Your business will suffer if you do not plan.

Leadership failure

Businesses collapse as a result of poor leadership. Leadership must be capable of making correct judgments the majority of the time. Leadership failures will affect all parts of your firm, from financial management to staff management. To develop their leadership qualities, the most successful entrepreneurs learn, research, and seek out mentors.

No differentiation

Having a fantastic product is not enough. You must also create a distinct value offer; otherwise, you will become lost in the crowd. What distinguishes your company from the competition? What distinguishes your company? Understanding what your rivals do better than you is critical. You won’t be able to develop a brand if you do not separate yourself.

Ignoring customer needs

Every company will tell you that a customer is number one, but only a small fraction of them do so. Failure causes businesses to lose contact with their customers. Keep an eye on your clients’ changing values. Check to see if they still enjoy your products. Are they looking for new features? Therefore, what exactly are they saying? Are you paying attention?

Inability to learn from failure

While we all know that failure is typically a terrible thing, businesses seldom learn from it. Realistically, businesses fail for a variety of reasons. Entrepreneurs are frequently blind to their errors. It is tough to learn from mistakes.

Poor management

Inability to listen, micro-managing – often known as a lack of trust – operating without standards or processes, poor communication, and a lack of feedback are all examples of poor management.

Lack of capital

This might prevent you from attracting investors. A lack of capital is a red flag. It indicates that a company may be unable to pay its payments, loans, and other financial obligations. Lack of finance makes it harder to expand the firm and puts day-to-day operations in jeopardy.

Premature scaling

Scaling is beneficial if done at the appropriate time. To put it another way, if you grow your firm too quickly, it will fail. You may, for example, be recruiting too many staff too rapidly or overspending on marketing. Do not expand your company unless you are ready.

Pets.com collapsed because it attempted to expand too quickly. They opened too many warehouses across the country too soon and it bankrupted them. Even their strong brand equity wasn’t enough to save them. Their stock dropped from $11 to $0.19 in a matter of months.

Poor location

Inconvenient location is a disadvantage that may be difficult to overcome. If your business relies on foot traffic, choosing the right location is crucial. Your client acquisition expenses may be excessively high due to a bad location.

Lack of profit

Revenue is not the same as profit. As an entrepreneur, you must always keep profitability in mind. Profit permits expansion. Only 40% of small firms are successful, 30% are breaking even and 30% are losing money, according to Small Business Trends.

• Pednekar, A. (2010). Entrepreneurship management. Himalaya Pub. House.
• Stutely, R. (2012). The definitive business plan. Pearson.

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• Types of Sales Force Structure
• Recruiting and Selecting Sales Personnel
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• Compensating the Sales Force
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• Technologies in Logistics
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• Conventional Distribution System
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• Types of Communication
• 7 C of Communication
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• Oral Communication
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• Limited Liability Partnership Act 2008
• Memorandum of Association
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• Trade Unions Act, 1926
• Industrial Disputes Act 1947
• Employee State Insurance Act 1948
• Payment of Wages Act 1936
• Payment of Bonus Act 1965
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Brand Management

• What is Brand Management?
• 4 Steps of Strategic Brand Management Process
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The importance of business plan: 5 key reasons.

A key part of any business is its business plan. They can help define the goals of your business and help it reach success. A good business plan can also help you develop an adequate marketing strategy. There are a number of reasons all business owners need business plans, keep reading to learn more!

Here’s What We’ll Cover:

What Is a Business Plan?

5 reasons you need a well-written business plan, how do i make a business plan, key takeaways.

A business plan contains detailed information that can help determine its success. Some of this information can include the following:

• Market analysis
• Cash flow projection
• Competitive analysis
• Financial statements and financial projections
• An operating plan

A solid business plan is a good way to attract potential investors. It can also help you display to business partners that you have a successful business growing. In a competitive landscape, a formal business plan is your key to success.

Check out all of the biggest reasons you need a good business plan below.

1. To Secure Funding

Whether you’re seeking funding from a venture capitalist or a bank, you’ll need a business plan. Business plans are the foundation of a business. They tell the parties that you’re seeking funding from whether or not you’re worth investing in. If you need any sort of outside financing, you’ll need a good business plan to secure it.

2. Set and Communicate Goals

A business plan gives you a tangible way of reviewing your business goals. Business plans revolve around the present and the future. When you establish your goals and put them in writing, you’re more likely to reach them. A strong business plan includes these goals, and allows you to communicate them to investors and employees alike.

3. Prove Viability in the Market

While many businesses are born from passion, not many will last without an effective business plan. While a business concept may seem sound, things may change once the specifics are written down. Often, people who attempt to start a business without a plan will fail. This is because they don’t take into account all of the planning and funds needed to get a business off of the ground.

Market research is a large part of the business planning process. It lets you review your potential customers, as well as the competition, in your field. By understanding both you can set price points for products or services. Sometimes, it may not make sense to start a business based on the existing competition. Other times, market research can guide you to effective marketing strategies that others lack. To have a successful business, it has to be viable. A business plan will help you determine that.

4. They Help Owners Avoid Failure

Far too often, small businesses fail. Many times, this is due to the lack of a strong business plan. There are many reasons that small businesses fail, most of which can be avoided by developing a business plan. Some of them are listed below, which can be avoided by having a business plan:

• The market doesn’t need the business’s product or service
• The business didn’t take into account the amount of capital needed
• The market is oversaturated
• The prices set by the business are too high, pushing potential customers away

Any good business plan includes information to help business owners avoid these issues.

5. Business Plans Reduce Risk

Related to the last reason, business plans help reduce risk. A well-thought-out business plan helps reduce risky decisions. They help business owners make informed decisions based on the research they conduct. Any business owner can tell you that the most important part of their job is making critical decisions. A business plan that factors in all possible situations helps make those decisions.

Luckily, there are plenty of tools available to help you create a business plan. A simple search can lead you to helpful tools, like a business plan template . These are helpful, as they let you fill in the information as you go. Many of them provide basic instructions on how to create the business plan, as well.

If you plan on starting a business, you’ll need a business plan. They’re good for a vast number of things. Business plans help owners make informed decisions, as well as set goals and secure funding. Don’t put off putting together your business plan!

If you’re in the planning stages of your business, be sure to check out our resource hub . We have plenty of valuable resources and articles for you when you’re just getting started. Check it out today!

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20 Reasons Why You Need a Business Plan in 2024

Written by Dave Lavinsky

What is a Business Plan?

A business plan is a document that details your business concept and strategy for growth. It provides details about your company, a competitive analysis, a market analysis, a marketing strategy to reach potential customers, and a financial plan so that you make the best possible decisions to start or grow your company. A good business plan will help you take your business idea and turn it into a tangible action plan for success.

What is the Purpose of a Business Plan?

A business plan serves as an essential tool for guiding a company’s direction and decision-making processes. Its core purpose is to provide a detailed roadmap that communicates the company’s mission and vision, long-term objectives, and tailored strategies intended to steer the business towards success. This living document plays a pivotal role in streamlining operations, achieving goals, and setting a foundation for sustained growth. The purposes of a business plan include:

• Creating an Effective Growth Strategy : It outlines a comprehensive plan that identifies clear steps and strategies for expanding the market presence and ideal customer base for the business.
• Determining Future Financial Needs : By creating financial projections, a business plan helps in understanding the capital requirements to fuel growth initiatives and sustain operations.
• Attracting Investors and Lenders : A well-crafted business plan is instrumental in drawing attention from potential investors, including angel investors and venture capitalists, by showcasing the growth potential and profitability prospects of the business.

By leveraging a business plan template , entrepreneurs can significantly enhance their ability to communicate their vision, attract necessary funding, and ensure that all stakeholders are aligned with the company’s strategic direction.

20 Reasons Why You Need a Business Plan

There are countless reasons why having a well-crafted business plan is essential to the success of any company. Here are top 20 reasons why a business plan is important:

1. To Prove That You’re Serious About Your Business

A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.

2. To Establish Business Milestones

The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you’d certainly share the news that you launched your new website or reached $1M in annual revenues.

3. To Better Understand Your Competition

Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages or unique value proposition. And if you don’t currently have competitive advantages, to figure out what you must do to gain them.

Finish Your Business Plan Today!

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4. To Better Understand Your Customer

Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to a great business plan and to a successful business. Understanding your customers will not only allow you to create better products and services for them, but will allow you to more cost-effectively reach them via advertising and promotions.

5. To Enunciate Previously Unstated Assumptions

The process of actually writing a business plan helps to bring previously “hidden” assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity. For example, you might have assumed that local retailers would carry your product; in your business plan, you could assess the results of the scenario in which this didn’t occur.

6. To Assess the Feasibility of Your Venture

How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture. In some cases, the result of your business planning will be to table the venture. And it might be to go forward with a different venture that may have a better chance of long-term success.

7. To Document Your Revenue Model

How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.

8. To Determine Your Financial Needs

Does your business need to raise funds? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.

9. To Attract Investors

A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.

10. To Reduce the Risk of Pursuing the Wrong Opportunity

The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.

11. To Force You to Conduct Market Research and Really Know Your Market

What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target audience for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace. And it will allow you to use this knowledge to make decisions to improve your company’s success.

12. To Attract Employees and a Management Team

To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that your great idea is sound and that the business is poised to achieve its strategic goals. Importantly, as you grow your company, your employees and not you will do most of the work. So getting them aligned and motivated will be key to your success.

13. To Plot Your Course and Focus Your Efforts

The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones. You wouldn’t go on a long driving trip without a map; think of your business plan as your map.

14. To Attract Partners

Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed information about your company.

15. To Position Your Brand

Creating the business plan helps to define your company’s role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners. With the industry, customer and competitive insight you gain during the business planning process, you can best determine how to position your brand.

16. To Judge the Success of Your Business

A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To Reposition Your Business to Deal with Changing Conditions

For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new business ideas and strategies.

18. To Document Your Marketing Plan

How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business. And the marketing strategies and tactics you use will evolve each year, so revisiting your marketing plan at least annually is critical.

19. To Understand and Forecast Your Company’s Staffing Needs

After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion. Importantly your plan can not only help you understand your staffing needs, but ensure your timing is right as it is time consuming to recruit and train great employees.

20. To Uncover New Opportunities

Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing on them which is often the difference between a business that fails or just survives and one that thrives.

Make Your Business Planning Count

One of the most common reasons businesses fail is the lack of a clear, strategic plan that addresses key components of running a business. Business plans help in identifying and navigating the challenges that can derail a business’s success, including poor market analysis, inadequate financial planning, and an unclear business model. By taking the time to write a business plan, entrepreneurs can clarify their business strategy, identify potential obstacles before they arise, and establish company goals that will set you up for success.

About Growthink Since 1999, Growthink’s business plan experts have assisted thousands of clients in launching and growing their businesses, and raising more than $2.5 billion in growth financing.

Need help with your business plan? 

• Speak with a professional business plan consultant from our team.
• Use our simple business plan template .
• Check out our business plan examples .
• Or, if you’re creating your own PPM, you can save time and money with Growthink’s private placement memorandum template .
• Learn more about us via our Growthink Business Plan Review page

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What Are the Functions of a Business Plan?

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It's not one of "those" dirty words, but "business plan" has assumed a distinctive place in the vernacular of many small-business owners. They're told they need one, try to muster the enthusiasm to write one, but inevitably put it off – sometimes until someone in a position of authority (like a banker) demands one.

Of all the planning documents an entrepreneur is advised to draft, a business plan is arguably the most critical of all. The irony is that it's usually the one small-business owners end up consulting most often – not just in the early days but also as the business grows and confronts challenges the owner could never anticipate. You may be resisting the exercise, as business owners understandably do because they want to expend their valuable energy on selling and winning over new clients. It may be time to upend this paradigm and let the merits of a business plan sell you.

Embrace the Role of a Business Plan

For a document that can span (brace yourself) dozens of pages, every section of a business plan should go to the heart of addressing two crucial questions:

• What do I want to accomplish with my new business?
• How am I going to accomplish it?

The questions belie the depth of the exercise, for a business plan probes the structure, organization, management and processes of a new venture in great detail – or at least as much detail as the new business owner has at his disposal at the moment.

Two may be a lucky number because the successful entrepreneurs at SCORE , who mentor so many others, reduce the purposes of a business plan to:

• Providing a cohesive vision for a small-business owner. This road map keeps a business owner focused on the journey ahead by providing clarity and focus, steering away from diversions that tempt many entrepreneurs in the early days.
• Demonstrating to lenders that the venture is different from others in the workplace, primed for success, and otherwise worth the risk.

The U.S. Small Business Administration invokes the road map analogy, too, saying: "You wouldn't drive 2,000 miles without a map, so don’t start a business without writing a business plan; it's your road map to success!"

Owners Value Role of a Business Plan

Though well-intentioned, the advice sidesteps an important reality: Most entrepreneurs don't rely on a bank loan to fund their startups. According to Small Biz Genius:

• 32 percent use their own cash.
• 13 percent dip into their retirement accounts.
• 12 percent turn to friends and family.

Only 24 percent rely on loans, which suggests that the first function of a business plan is the more important of the two. Put another way, you may not need that road map when things are going well, but running a small business is nothing if not an adventure, filled with unexpected challenges, detours and the occasional accident. It's at these junctures that the road map becomes an indispensable guide to regaining your bearings and getting back on track.

A study of 1,000 entrepreneurs by the Harvard Business Review bears this out. It found that the most successful ones wrote their business plan within six and 12 months of deciding to start their own business. It's precisely when they are starting to sell and win over clients that writing the plan comes into sharper focus. The HBR found that committing a plan to paper increases a startup's chance of viability by 27 percent.

Business Plan Areas Cover the Bases

At some point, you may want to take out a loan to pay for new equipment or to fund an expansion. Then a business plan becomes a necessity. Until then, Nolo says it plays a role in the financial future of your business by:

• Analyzing the competition so it can outmaneuver it
• Outlining a winning marketing strategy and tactics
• Providing revenue and expense estimates
• Crystallizing how the business will turn a profit
• Anticipating risks and opportunities
• Forecasting its financial future

This is a wide load to superimpose on any road map, but it's a completely attainable one when you consider the format of a business plan advocated by the U.S. Small Business Administration . It sets you up for success with a sensible, nine section progression of ideas:

• Executive summary
• Company description
• Market analysis
• Organization and management
• Product line or service
• Sales and marketing
• Financial projections

Many business experts agree that a business plan should consist of at least 50 pages to cover these topics thoroughly. However, as with many undertakings, it's quality, not quantity, that matters most. This is why the Harvard Business Review says it found that those successful entrepreneurs devoted about three months to writing their business plan – a realistic amount of time to scrub this once dirty word from anybody's vocabulary.

• SCORE: What Is the Purpose of a Business Plan?
• The U.S. Small Business Administration: SBA Learning Center
• Small Biz Genius: 39 Entrepreneur Statistics You Need to Know in 2021
• Harvard Business Review: When Should Entrepreneurs Write Their Business Plans?
• Nolo: Why You Need to Write a Business Plan
• U.S. Small Business Administration: Write Your Business Plan

Mary Wroblewski earned a master's degree with high honors in communications and has worked as a reporter and editor in two Chicago newsrooms. Then she launched her own small business, which specialized in assisting small business owners with “all things marketing” – from drafting a marketing plan and writing website copy to crafting media plans and developing email campaigns. Mary writes extensively about small business issues and especially “all things marketing.”

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The Importance of Strategic Planning

Every successful business has a plan and knows where it is heading in the future. Setting a plan with goals, target dates, and a purpose should be finalized before embarking on a business. Taking the time on an ongoing basis to review the company's past performance, and predict its future performance, gives it a road map to follow.

Without strategic planning , which is knowing the current state of your business and where you want it to go, most businesses will fail. A strategic plan allows you to see what is important, how to get there, the pitfalls to avoid, and the noise to ignore. Below we discuss some of the reasons why strategic planning is important and how to implement it.

Key Takeaways

• Strategic planning is crucial for a business as it creates a map for a business to follow and course correct when need be.
• The first part of a strategic plan is the business plan, which outlines the purpose of the business, budgets, goals, and the mission statement.
• Making time to evaluate your business on an ongoing basis will allow you to determine how well your results are adhering to your plan. This will allow you to make adjustments or double-down on how the business is being run.
• Communicating your strategic plan to your employees is critical so that everyone is on the same page and working towards the same goals.
• Reviewing and following up on your business will highlight strengths and weaknesses in your business so that you can continue with what works well and eliminate what is hindering the growth of your business.

The very first strategic planning most businesses do is a business plan . When you first start your business, you will likely have prepared a mission statement , a budget, and a marketing and promotion plan. The business plan is a good first step, but it needs to be reviewed and updated as the business continues and grows. If you shove it in a drawer and let dust gather on it, it won't serve as the foundation of your business, as it was meant to.

A business plan serves as the blueprint for a company's success, providing a comprehensive roadmap that outlines its objectives, strategies, and tactics for achieving growth and profitability. In some cases, a business plan is also necessary for attracting external funding and support from an outside investor or bank.

How you go about conducting strategic planning will depend on many variables, including the size of your business, the time frame included, and your personal preferences. The most common style of plan is goals-based. In this type of plan, you set goals for the business (financial and non-financial) and map out the steps needed to meet those goals.

For example, if your goal is to have $100,000 in revenues next year, the steps to get there might include bringing in five new clients a month and attending three trade shows. Whatever the goals you set for your business, they should be concrete and measurable so that you know when you reach them. Another method of strategic planning is mission-based.

When you first started your business, you likely developed a mission or values statement, outlining the purpose of your company and its overall reason for being. A mission-based strategic plan ties each part of the plan into the mission, to ensure that the company is always operating in the service of that mission.

For example, if your mission statement is to be recognized as a leader in the financial services sector and to help families become financially independent, your strategic plans should address how you will meet those goals.

It can be difficult to find the time to plan your business. Other, more pressing priorities, like trying to bring in revenue , may grab your attention; however, carving out time regularly will help you keep on top of your business.

Blocking off a few hours a day or week to focus on your plan should be part of your business operations. During that time, you can examine the prior week's financial performance and update any marketing initiatives to make sure that your business is on track with your initial plan. If it's not, then you'll need to make adjustments to get back on track.

Regardless of how often you plan, make sure that you set it in stone in your day planner. Block off the time and don't let anything else get in the way. Turn off your cell phone and, if at all possible, go somewhere away from your office to plan in order to minimize distractions.

As a business owner, you will most likely have employees. It is critical to inform them of your strategic plan so that they are on the same page and working towards the same goal as you.

Including your staff in your strategic plan will instill a feeling of responsibility in their jobs that will help ensure productivity.

For example, if you have a sales team and your strategic plan involves bringing in five new clients a month, your sales team needs to be aware of this so that they know the goal to achieve. If they don't, perhaps they would be under the assumption that bringing in two new clients a month is excellent, when in actuality, it is only 40% of your goal. Without clear communication to your employees, your business will be a boat set adrift without any course to follow.

A critical part of the planning process is reviewing your previous plan and comparing it to your actual results. Were you able to bring in five new clients last month? If not, why not? Tweak the plan going forward to account for changes in your business or the general economic climate. The more experience you get with the planning process and with the operational side of your business, the more accurately you will be able to plan.

Once you have had your business running for a while and block out time to follow up on your strategic plan, you will be able to determine where the strengths and weaknesses in your business lie. This would allow you to correct course, perhaps changing your business plan and goals slightly to focus on your strengths, while allowing you to eliminate your weakness, making your business stronger and increasing the likelihood of achieving your goals.

Why Is Strategic Planning Important for Businesses?

Strategic planning is crucial for businesses because it provides a roadmap for achieving long-term objectives, identifying opportunities, and mitigating risks. It helps align organizational resources, activities, and goals, ensuring that everyone is working towards a common vision.

What Are the Key Benefits of Strategic Planning?

The key benefits of strategic planning include improved decision-making, enhanced resource allocation, increased organizational alignment, better risk management, and the ability to seize opportunities for growth and innovation.

What Are the Risks of Not Having a Strategic Plan in Place?

Without a strategic plan, organizations may struggle to maintain focus, allocate resources efficiently, or adapt to changing circumstances. They may miss opportunities for growth or become vulnerable to competitive threats. Companies with a strategy may be more likely to face challenges in sustaining long-term success.

What Are Some Best Practices for Effective Strategic Planning?

Best practices for effective strategic planning include involving key stakeholders in the process and conducting thorough environmental scans to fully understand all aspects of a company that will be impacted. This can be done through a SWOT analysis. Once your strategy is in place, set clear and measurable objectives, regularly monitor progress, and don't be afraid to realign the strategy with new information as it comes available.

Planning out the future of your business is the best way to ensure success. Creating an initial plan and communicating that plan to your employees will ensure that everyone is working towards the same goal.

Taking out time to review your business's results and comparing them to your plan will help ensure that the right policies and procedures continue whereas those that are not benefiting the company will be removed. It may seem awkward and difficult at first to create a strategic plan, but with practice, you will be able to move your business in the right direction.

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Why Planning Is Important (Explained)

By: Author Paul Jenkins

Posted on May 4, 2022

Categories Business , Productivity

When it comes to planning, most people think of things like schedules and organization. While these are important aspects of effective planning, there’s much more to it than that! Good planning can help you achieve your goals and dreams by keeping you on track and focused – in business, and in life. Here are just a few reasons why planning is so important.

Why Planning Is Important

Plans are important. Although they may seem like an onerous mechanism designed to burden you with strict regulations and stressful deadlines, the planning process can actually be a liberating force that opens your mind to new possibilities and helps you put your ideas into action.

If you stay flexible and dynamic enough, planning can become a way of life. Your plans will change depending on the situation – and like life itself, they won’t always work out the way you hoped. But if you know how to adapt at all times, there’s no reason things can’t turn out for the best.

Planning is important in business and management because it gives companies a firm structure for their future so that their activities are consistent and organized.

Planning is also important in education because it helps students study for exams or complete assignments and learn more about certain subjects by preparing them with easy-to-understand information before the actual exam takes place.

Why Is Strategic Planning Important in an Organization?

Planning is critical for any business. In most cases, companies that don’t have a mission and vision are doomed to fail – because, without goals, there are no targets or actions to guide the company.

Without a plan, it’s almost like you’re flying blind in the dark or playing without a net – which can lead to unpredictable results. And remember, we all know what happens when you shoot in the dark: You usually hit something hard.

So … why is strategic planning important?

Because it enables organizations to achieve their strategic goals and achieve them well. It helps them prioritize and allocate resources effectively – leading to greater efficiency and a higher standard of living for all.

Of course, it takes time to create an effective plan, but when it’s done well, every organization benefits from having it in place as soon as possible, even if there are no immediate benefits at first glance.

Planning Is a Way to Stay Goal-Oriented

Setting goals is one of the most important things you can do as a business leader because they help you stay focused. Planning allows you to create a good structure and keep your team on task.

Once you’ve set your goals, it’s time to develop a plan that will help you achieve those goals.

A good business plan gives direction to your business and serves as a source of inspiration for everyone involved in your business. It provides an overview of what’s going on in the business and how it plans to achieve its goals.

If you don’t have this kind of clarity, it’s much harder for your employees to know what their specific jobs are or how they contribute to the company’s overall mission.

Your business planning doesn’t have to fill several volumes and require a group presentation before it’s approved by all the managers in your organization-you can quickly create it on your own or with a handful of members of your team who’ve relevant experience in the field (or all by yourself if you’re ambitious).

Even though large companies use complex planning methods, that doesn’t mean small companies have to. Even if you just write down a few key points about why certain strategies are effective and what results they’re likely to produce, it can be easier to write down an idea like this when you’re trying to figure out which avenues are worth pursuing next.

Long-Range Plans Provide the Guidance Needed to Meet the Goals of An Organization

For organizations to survive and thrive, they must make good long-term plans. Otherwise, their goals won’t be achieved or they’ll not be able to keep up with the rapid changes the world is currently experiencing.

For plans to be effective, they must be aligned with an organization’s goals.

In addition, a plan is only complete if there are measures to track progress. Long-term planning requires good communication within an organization so that everyone involved understands what needs to be done and how it fits into the big picture.

For example, if you were in charge of a mail delivery company, your plan might include hiring new employees who’ve good interpersonal skills so they can better deal with customers and solve problems that arise. If you include too much detail in your plan or try to cover too many areas without focusing on what’s most important to the success of your business, you could run out of time and resources before you get anything done.

Whether you’re running a small business from home or a large company with thousands of employees around the world, being able to plan for the future will help you keep up with growing demands and changing trends.

Without thoughtful, long-term planning, a business won’t be able to survive in today’s fast-paced global marketplace. Good planning is critical when dealing with organizational change.

It Helps an Organization Meet Its Objectives and Missions

Most companies have a mission statement, sometimes more than one. But what does it mean?

A mission statement is the reason for a company’s existence. It describes what the company wants to achieve and what values guide its behavior. Mission statements usually begin with the words “Our mission is…” or “The mission of [company name] is…”. They’re meant to be inspirational, visionary, and even poetic.

Mission statements are often confused with corporate goals.

A corporate goal describes how you’ll achieve your mission. For example, “Increase our sales by 30% over 2 years” would be a goal of the chief executive officer (CEO) of a chain of toy stores who wants to grow his business.

The CEO might say to his team, “Our mission is to increase sales by 30% over time. To achieve that goal, I want us all to focus on selling more toys.” Although the goal may follow from a discussion of the mission, these are different things, and goals don’t always have to follow directly from an organization’s stated purpose.

The Importance of Strategic Planning

What’s strategic planning?

Strategic planning may sound like a highfalutin term from the business world or something only large corporations need to worry about, but a strategic planning process is actually something every organization can use.

Let’s take online publishing, as an example.

The concept itself is pretty simple: you look at your team and your goals, and then design either a written plan or a visual graphic – the best way to achieve those goals. This way, you can identify what’s working and what could be better in clear steps.

Strategic Planning to Support and Engage Your Audience

The first step in strategic planning is to figure out who your audience is and where they’re going.

Once you’ve done that, you can tailor your content to their interests (and keep them engaged by avoiding the most common social media marketing mistakes). For example, if one of your followers likes Game of Thrones, they might also be interested in posts about medieval weaponry.

Next, think about how you can best communicate with these people.

Do you create short videos? Longer blog posts? Or do you want to set up an email list so people can get information from just one place? If it helps you organize things, take note of how often and when certain posts are optimal – maybe Facebook Live works best in the morning, or maybe Twitter conversations thrive on Tuesday evenings.

Also, think about how much time each strategy will take – some tactics require more energy than others!

Then, once you’ve got everything planned out and all the details ready to go, don’t forget to document it all somewhere. A masterful strategic plan should have some sort of record so everyone knows exactly why things are happening the way they are!

An Effective Business Plan Provides a Roadmap for Success

An effective business plan aims to achieve one or more of the following goals:

• To help attract investors by showing that your company is stable has lots of potential and will yield a high return on investment
• To help you secure financing by providing lenders with financial information about your business
• To guide the management team as they make day-to-day decisions about how to run their business and conduct the organizational activity
• To help you anticipate challenges so you can better manage them as they arise

Of course, if businesses didn’t need plans, it wouldn’t be a bad thing! Having a plan can take time away from other important tasks, like running your business and making money for yourself.

However, most large companies in the United States have written formal business plans that outline their goals for the future and methods for achieving them.

Therefore, it’s safe to assume that if professional businesses include formal plans in their operations, small businesses can benefit from planning as well-at least enough to provide an outline for success but not necessarily an exhaustive guidebook to managing every aspect of their company on a daily basis or down to the last decimal point in Excel spreadsheet projections.

Why Is Planning Important in Management?

Planning is an essential part of management. It helps the company set goals for the future, sets a course to sail from the present into the future, and helps keep things organized and efficient as time passes.

Most organizations will have at least one project manager dedicated to this job.

Planning also sets the course for communication and decision-making within an organization. Daily planning and effective project management ensure that everyone knows what needs to be done and when it needs to be done, helping the business run more smoothly from day to day.

Finally, project planning helps with accountability- when you’re not just making decisions off the cuff, you’ve concrete records of how those decisions have impacted your business (or personal life) in the past, which can help you make better decisions in the future.

A plan may seem like a dull affair at times, but once you realize that it pays off over time, it becomes one of your most valuable tools for staying in control of your situation.

What Should Be Included in a Business Plan

A business plan is a document that clearly communicates the mission, purpose, and goals of your business. The first and most important section of the business plan is the executive summary. This is what investors will read to decide if they want to invest in your business.

To get where you want to go, there are some important things to consider:

• First, how does your business or idea fit into the world?
• What is the business idea?
• What makes it special and different?
• Then, who are your customers or clients?
• What problems do they have that your service or product can provide a solution for?
• You should also take a look at the competition – who’s doing the same thing?
• How is your business better than theirs?

Business Plans Help Facilitate Communication, Establish Priorities, and Set Smart Goals

Planning is important, and your business plan should be the foundation for it. This document lays out your company’s organizational goal, priorities, goals, and strategies (both short and long term) so that everyone involved can work toward the same goal. It also ensures that nothing falls through the cracks.

Good communication is at the heart of good planning, and the implementation of a plan:

• It helps you communicate with others about what your business does and how it does it. Collaboration is an effective way to make smart decisions, improve productivity and quality of work, and increase the success of your business.
• It sets priorities for your team . You can create a plan based on several possible goals that are most important to you – such as increasing revenue or improving customer service – or based on industry standards or benchmarks, such as industry-specific revenue goals.
• It helps you plan your human resource management and the effective funneling of innovative ideas.
• For each goal, you’ll specify exactly what results you want to achieve and by when. You can then use milestones to track progress against those expectations. This gives you insight into where you stand and allows you to re-evaluate if you need to make adjustments.
• This allows you to be flexible with your goals, leaving room for changes that depend on circumstances such as seasonal demands or economic changes beyond your control. While you’ll keep an eye on key performance indicators to make sure no one strays too far from their goals, having some wiggle room gives you more opportunity to adjust when things go wrong and seize opportunities when something unexpected happens that could bring great new value to your organization (or rather, “your” organization).
• In short, a plan helps keep everyone working together toward a common goal while leaving room for spontaneous developments along the way.

Proper Planning for All Areas of Your Business Can Help You Achieve Your Goals

Planning is important in every area of your life, but especially in business. When you create a good plan, you think about the future you want to achieve and lay out steps to get there. It’s the roadmap to ensuring you meet important goals.

In planning, you ask yourself questions and think honestly about what’ll help you achieve your goals. When you have a plan, you’re prepared for unexpected difficulties.

More From Forbes

How to plan your career path.

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What's the best way to plan your career path? originally appeared on Quora : the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Charlene Walters, PhD, Business Mentor, Consultant, Corporate Trainer & Author, on Quora :

What’s so amazing about one’s career path these days is that it is much more fluid, which also makes it more challenging to plan at times. Still, the best way to keep up with this fluidity is to actually plan , do lots of research, and be fluid yourself. You should stay abreast of changes in your industry as well as overall trends in business. This will lead you down new paths and inspire you to grow your skills and expand your career.

The first step with any career plan is figuring out what you want to do. Then, it’s just a question of breaking the path to get there down into more manageable steps. Perhaps you need to update your skills, or network more to gain new contacts in fields or companies that you want to enter.

It may be that you need a more substantial plan if you are switching into an entirely new area. I know that, for me, I have continued to morph and grow my career, particularly as an entrepreneur. I’ve added new services and de-emphasized others. I’ve picked up new skills and given my career a complete overhaul at times. I’m currently in the midst of one right now, launching a new AI product, something that I had never originally anticipated.

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Things change quickly in business, and with technology, the pace will only continue to accelerate. Therefore, you will need a plan, but not one that is set in stone. Your plans should be as fluid as your career path. No matter what, you are the navigator and have the opportunity to steer your career in new and amazing directions every day. Plan, research, brainstorm, and keep moving!

This question originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world.

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What Are Business Ethics & Why Are They Important?

• 27 Jul 2023

From artificial intelligence to facial recognition technology, organizations face an increasing number of ethical dilemmas. While innovation can aid business growth, it can also create opportunities for potential abuse.

“The long-term impacts of a new technology—both positive and negative—may not become apparent until years after it’s introduced,” says Harvard Business School Professor Nien-hê Hsieh in the online course Leadership, Ethics, and Corporate Accountability . “For example, the impact of social media on children and teenagers didn’t become evident until we watched it play out over time.”

If you’re a current or prospective leader concerned about navigating difficult situations, here's an overview of business ethics, why they're important, and how to ensure ethical behavior in your organization.

Access your free e-book today.

What Are Business Ethics?

Business ethics are principles that guide decision-making . As a leader, you’ll face many challenges in the workplace because of different interpretations of what's ethical. Situations often require navigating the “gray area,” where it’s unclear what’s right and wrong.

When making decisions, your experiences, opinions, and perspectives can influence what you believe to be ethical, making it vital to:

• Be transparent.
• Invite feedback.
• Consider impacts on employees, stakeholders, and society.
• Reflect on past experiences to learn what you could have done better.

“The way to think about ethics, in my view, is: What are the externalities that your business creates, both positive and negative?” says Harvard Business School Professor Vikram Gandhi in Leadership, Ethics, and Corporate Accountability . “And, therefore, how do you actually increase the positive element of externalities? And how do you decrease the negative?”

Related: Why Managers Should Involve Their Team in the Decision-Making Process

Ethical Responsibilities to Society

Promoting ethical conduct can benefit both your company and society long term.

“I'm a strong believer that a long-term focus is what creates long-term value,” Gandhi says in Leadership, Ethics, and Corporate Accountability . “So you should get shareholders in your company that have that same perspective.”

Prioritizing the triple bottom line is an effective way for your business to fulfill its environmental responsibilities and create long-term value. It focuses on three factors:

• Profit: The financial return your company generates for shareholders
• People: How your company affects customers, employees, and stakeholders
• Planet: Your company’s impact on the planet and environment

Check out the video below to learn more about the triple bottom line, and subscribe to our YouTube channel for more explainer content!

Ethical and corporate social responsibility (CSR) considerations can go a long way toward creating value, especially since an increasing number of customers, employees, and investors expect organizations to prioritize CSR. According to the Conscious Consumer Spending Index , 67 percent of customers prefer buying from socially responsible companies.

To prevent costly employee turnover and satisfy customers, strive to fulfill your ethical responsibilities to society.

Ethical Responsibilities to Customers

As a leader, you must ensure you don’t mislead your customers. Doing so can backfire, negatively impacting your organization’s credibility and profits.

Actions to avoid include:

• Greenwashing : Taking advantage of customers’ CSR preferences by claiming your business practices are sustainable when they aren't.
• False advertising : Making unverified or untrue claims in advertisements or promotional material.
• Making false promises : Lying to make a sale.

These unethical practices can result in multi-million dollar lawsuits, as well as highly dissatisfied customers.

Ethical Responsibilities to Employees

You also have ethical responsibilities to your employees—from the beginning to the end of their employment.

One area of business ethics that receives a lot of attention is employee termination. According to Leadership, Ethics, and Corporate Accountability , letting an employee go requires an individualized approach that ensures fairness.

Not only can wrongful termination cost your company upwards of $100,000 in legal expenses , it can also negatively impact other employees’ morale and how they perceive your leadership.

Ethical business practices have additional benefits, such as attracting and retaining talented employees willing to take a pay cut to work for a socially responsible company. Approximately 40 percent of millennials say they would switch jobs to work for a company that emphasizes sustainability.

Ultimately, it's critical to do your best to treat employees fairly.

“Fairness is not only an ethical response to power asymmetries in the work environment,” Hsieh says in the course. “Fairness—and having a successful organizational culture–can benefit the organization economically and legally.”

Why Are Business Ethics Important?

Failure to understand and apply business ethics can result in moral disengagement .

“Moral disengagement refers to ways in which we convince ourselves that what we’re doing is not wrong,” Hsieh says in Leadership, Ethics, and Corporate Accountability . “It can upset the balance of judgment—causing us to prioritize our personal commitments over shared beliefs, rules, and principles—or it can skew our logic to make unethical behaviors appear less harmful or not wrong.”

Moral disengagement can also lead to questionable decisions, such as insider trading .

“In the U.S., insider trading is defined in common, federal, and state laws regulating the opportunity for insiders to benefit from material, non-public information, or MNPI,” Hsieh explains.

This type of unethical behavior can carry severe legal consequences and negatively impact your company's bottom line.

“If you create a certain amount of harm to a society, your customers, or employees over a period of time, that’s going to have a negative impact on your economic value,” Gandhi says in the course.

This is reflected in over half of the top 10 largest bankruptcies between 1980 and 2013 that resulted from unethical behavior. As a business leader, strive to make ethical decisions and fulfill your responsibilities to stakeholders.

How to Implement Business Ethics

To become a more ethical leader, it's crucial to have a balanced, long-term focus.

“It's very important to balance the fact that, even if you're focused on the long term, you have to perform in the short term as well and have a very clear, articulated strategy around that,” Gandhi says in Leadership, Ethics, and Corporate Accountability .

Making ethical decisions requires reflective leadership.

“Reflecting on complex, gray-area decisions is a key part of what it means to be human, as well as an effective leader,” Hsieh says. “You have agency. You must choose how to act. And with that agency comes responsibility.”

Related: Why Are Ethics Important in Engineering?

Hsieh advises asking the following questions:

• Are you using the “greater good” to justify unethical behavior?
• Are you downplaying your actions to feel better?

“Asking these and similar questions at regular intervals can help you notice when you or others may be approaching the line between making a tough but ethical call and justifying problematic actions,” Hsieh says.

Become a More Ethical Leader

Learning from past successes and mistakes can enable you to improve your ethical decision-making.

“As a leader, when trying to determine what to do, it can be helpful to start by simply asking in any given situation, ‘What can we do?’ and ‘What would be wrong to do?’” Hsieh says.

Many times, the answers come from experience.

Gain insights from others’ ethical decisions, too. One way to do so is by taking an online course, such as Leadership, Ethics, and Corporate Accountability , which includes case studies that immerse you in real-world business situations, as well as a reflective leadership model to inform your decision-making.

Ready to become a better leader? Enroll in Leadership, Ethics, and Corporate Accountability —one of our online leadership and management courses —and download our free e-book on how to be a more effective leader.

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Importance of a Business Plan

Importance of a Business Plan – A business plan is a written document that outlines the goals, strategies, target market, and financial forecasts of a business. It is an essential tool for any entrepreneur or business owner, serving as a roadmap for the business’s future. While some may view business plans as mere formalities or bureaucratic necessities, their importance cannot be overstated. A well-crafted business plan can make the difference between success and failure, providing clarity, direction, and a framework for measuring progress.

Throughout this article we will discover the true importance of a business plan covering;

Why Every Business Needs a Business Plan

• The Key Components of a Business Plan

Common Mistakes to Avoid in Business Planning

1. clarifies vision and strategy.

A business plan helps to crystallize your vision and strategy. It forces you to think critically about your business idea, the market you are entering, and how you will compete. By writing down your vision, mission, and goals, you create a clear picture of what you want to achieve and how you plan to get there. This clarity is crucial not only for you as the business owner but also for your team and potential investors.

2. Facilitates Goal Setting and Performance Tracking

Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals is a cornerstone of effective business planning. A business plan allows you to set these goals in a structured manner and track your progress over time. By regularly reviewing your business plan, you can assess whether you are on track to meet your objectives and make necessary adjustments. This ongoing process of goal setting and performance tracking helps ensure that your business remains focused and aligned with its strategic vision.

3. Helps Secure Funding

One of the most critical functions of a business plan is to secure funding. Whether you are seeking a loan from a bank, attracting venture capital, or soliciting angel investors, a comprehensive business plan is essential. Investors and lenders want to see that you have a clear strategy, a solid understanding of the market, and a realistic financial forecast. A business plan provides this information, increasing your chances of obtaining the funding you need to grow your business.

4. Identifies Potential Risks and Challenges

Every business faces risks and challenges, and a business plan helps you identify and mitigate these risks. By conducting a thorough market analysis, competitive analysis, and SWOT (strengths, weaknesses, opportunities, threats) analysis, you can anticipate potential obstacles and develop strategies to overcome them. This proactive approach to risk management can save your business time, money, and resources in the long run.

5. Enhances Communication and Alignment

A business plan serves as a communication tool, aligning your team and stakeholders around a common vision and strategy. It ensures that everyone understands the business’s goals, their role in achieving these goals, and the metrics for success. This alignment is crucial for fostering collaboration, improving decision-making, and driving the business forward.

6. Supports Strategic Planning and Decision Making

Strategic planning involves making long-term decisions about the direction of your business. A business plan provides the foundation for this process, helping you make informed decisions based on data and analysis. Whether you are considering a new product launch, market expansion, or a merger or acquisition, a business plan offers the insights and framework needed to evaluate these opportunities and make sound strategic choices.

7. Provides a Roadmap for Growth

A business plan outlines the steps necessary to achieve growth and expansion. It identifies key milestones, resources required, and potential challenges, providing a roadmap for scaling your business. By following this roadmap, you can systematically grow your business, leveraging opportunities and navigating obstacles with greater confidence and efficiency.

8. Improves Operational Efficiency

A business plan details your operational strategy, including production processes, supply chain management, and quality control. By clearly defining these processes, you can identify areas for improvement and optimize your operations. This focus on operational efficiency can lead to cost savings, higher quality products or services, and improved customer satisfaction.

9. Facilitates Marketing and Sales Strategies

A business plan includes a comprehensive marketing and sales strategy, outlining how you will attract and retain customers. It details your target market, value proposition, marketing channels, and sales tactics. By having a clear marketing and sales strategy, you can more effectively allocate resources, track the effectiveness of your campaigns, and adjust your approach based on performance data.

10. Ensures Legal and Regulatory Compliance

Operating a business requires compliance with various legal and regulatory requirements. A business plan helps you identify these requirements and develop a plan to meet them. This includes obtaining necessary licenses and permits, adhering to industry standards, and complying with tax and employment laws. By ensuring legal and regulatory compliance, you can avoid costly fines and legal issues.

Key Components of a Business Plan

Importance of a Business Plan – A comprehensive business plan typically includes the following components:

1. Executive Summary

The executive summary is a concise overview of your business plan, highlighting the key points. It should include your business’s mission statement, the products or services you offer, your target market, and your financial projections. The executive summary should be compelling and engaging, as it is often the first section that investors and lenders read.

2. Business Description

This section provides an in-depth description of your business, including its history, structure, and objectives. It should explain what your business does, the market it serves, and its unique value proposition. This section sets the stage for the rest of the business plan by providing context and background information.

3. Market Analysis

A thorough market analysis is crucial for understanding the industry landscape and identifying opportunities and threats. This section should include an analysis of your target market, industry trends, competitive landscape, and potential barriers to entry. By demonstrating a deep understanding of the market, you can build credibility and show that your business is well-positioned for success.

4. Organization and Management

This section outlines your business’s organizational structure and management team. It should include information about the ownership structure, key team members, and their roles and responsibilities. Highlighting the experience and expertise of your management team can instill confidence in investors and lenders.

5. Products or Services

In this section, you should provide detailed information about the products or services you offer. This includes their features, benefits, and competitive advantages. If applicable, you should also include information about your product development process, intellectual property, and any patents or trademarks.

6. Marketing and Sales Strategy

Your marketing and sales strategy outlines how you plan to attract and retain customers. This section should include information about your target market, value proposition, marketing channels, and sales tactics. It should also detail your pricing strategy, promotional activities, and customer acquisition and retention plans.

7. Financial Projections

Financial projections are a critical component of your business plan, providing a forecast of your business’s financial performance. This section should include income statements, cash flow statements, and balance sheets for the next three to five years. It should also include a break-even analysis and any assumptions used in your projections. Accurate and realistic financial projections are essential for securing funding and managing your business’s financial health.

8. Funding Request

If you are seeking funding, this section should outline your funding requirements and how you plan to use the funds. This includes the amount of funding you need, the type of funding (e.g., loan, equity investment), and how the funds will be allocated (e.g., marketing, product development, operations). Clearly articulating your funding needs and how the funds will be used can increase your chances of securing the necessary capital.

9. Appendix

The appendix includes any additional information that supports your business plan, such as resumes of key team members, product images, legal documents, and market research data. While not essential, the appendix can provide valuable context and detail that enhances the overall credibility of your business plan.

Importance of a Business Plan – While a business plan is a valuable tool, it is important to avoid common pitfalls that can undermine its effectiveness:

1. Lack of Research

A business plan should be based on thorough research and data. Failing to conduct adequate market research, competitive analysis, and financial forecasting can lead to unrealistic assumptions and flawed strategies. Invest the time and resources needed to gather accurate and comprehensive information.

2. Overly Optimistic Projections

It is natural to be optimistic about your business’s potential, but overly optimistic financial projections can be detrimental. Investors and lenders are looking for realistic and achievable forecasts. Ensure that your financial projections are grounded in reality and supported by data.

3. Ignoring Risks and Challenges

Every business faces risks and challenges, and failing to address them in your business plan can be a red flag for investors and lenders. Be honest about potential obstacles and develop strategies to mitigate them. Demonstrating a proactive approach to risk management can build credibility and trust.

4. Vague Goals and Objectives

Specific, measurable goals are essential for tracking progress and measuring success. Avoid vague or generic goals that lack clarity and detail. Instead, set SMART goals that provide a clear roadmap for your business’s growth and development.

5. Neglecting the Executive Summary

The executive summary is often the first section that investors and lenders read, so it is crucial to make a strong first impression. Ensure that your executive summary is concise, compelling, and highlights the key points of your business plan.

6. Failure to Update the Plan

A business plan is a living document that should be regularly reviewed and updated. As your business evolves and the market changes, your business plan should reflect these developments. Regularly updating your business plan ensures that it remains relevant and effective.

The Importance of a Business Plan Conclusion

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What Is Business Impact Analysis & Why Is It Important?

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What is business impact analysis (bia).

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Why Business Impact Analysis Is Important

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Businesses go through a lot. Managers must always be aware of the internal and external factors that can impact their business growth such as economic fluctuations, new competitors, new market trends and more. One of the most common threats to any company is called business disruption.

Business disruption happens whenever a radical change occurs and affects how companies compete in a given industry. An example of business disruption could be the development of a new technology that renders the current methods useless. In this case, what can business managers do? Execute a business impact analysis (BIA).

Business impact analysis is an important tool to help plan for the inevitability of consequences and their cost. BIA is a versatile process that’s used for risk assessment, business continuity planning and disaster recovery planning. Risk is always on the horizon and the better-equipped businesses are to prepare for risk management, the more likely they’ll be able to continue doing business in the future.

Business impact analysis (BIA) is a method to predict the consequences of disruptions to a business, its processes and systems by collecting relevant data. This data can be used to develop strategies for the business to recover in the case of an emergency.

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Scenarios that could potentially cause losses to the business are identified. These can include suppliers not delivering, delays in service, etc. The list of possibilities is long, but it’s key to explore them thoroughly in order to best assess risk. It’s by identifying and evaluating these potential risk scenarios that a business can determine a plan of investment for recovery and mitigation strategies, along with outright prevention.

What Does BIA Address?

The business impact analysis analyzes the operational and financial impacts of a business disruption. These impacts include lost sales and income, delayed sales or income, increased expenses, regulatory fines, contractual penalties, a loss of customers and a delay of new business plans.

Another factor to take into account is timing. The timing of a disruptive event can have a major impact on the loss suffered by a business. If your store is damaged by a natural disaster before a big sale or large seasonal holiday, the impact is greater than during a slower period.

The business impact analysis operates under two assumptions:

• Every part of the business is dependent on the continued operations of the other parts of the business.
• Some parts of the business are more important than others, requiring more allocations when disruptions occur.

BIA vs. Risk Assessment

BIA and a business risk assessment are similar, but the main difference is that a BIA is more specific as it focuses on the business continuity requirements, resource availability and the impact of a business disruption.

On the other hand, risk assessment focuses on the severity and likelihood of potential business risks. This is done to prioritize the risks and create mitigation strategies to solve them.

BIA vs. Business Continuity Planning

Business impact analysis is a component of business continuity planning because a BIA is meant to provide important data for a business continuity plan . How does this work?

A BIA is conducted to determine the most critical business processes, the impact of business disruption in those processes and the resources needed to restore them.

These are all fundamental variables to factor in when creating a business continuity plan, which will act as the course of action that’s taken to ensure that a business will be able to recover from a business disruption.

BIA vs. Disaster Recovery Planning

Similar to the relation between BIA and business continuity planning, BIA is also a useful tool when creating a disaster recovery plan. The BIA identifies failure modes and the costs associated with them. The information obtained from the BIA report is then used as input to create a fully-fledged disaster recovery plan .

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How to Conduct a BIA in 4 Steps

While there’s no set way to conduct a business impact analysis, the process follows the general path outlined below.

1. Get Approval

The first step is to initiate the process by getting approval from senior management for the project. To begin, define the objectives, goals and scope of the business impact analysis. It should be clear what the business is seeking to achieve.

Then, it’s important to form a project team to execute the business impact analysis. This can be existing staff as long as they know how to conduct a business impact analysis, but this team can be outsourced to a team that’s skilled in this process if the business doesn’t have people for this task.

2. Collect Information

The next step is collecting the information needed to make the analysis. This data can be gathered in several ways, from interviews to a business impact analysis questionnaire, which is the most common tool.

The questionnaire is a detailed survey that’s been developed by the business impact analysis team and has targeted questions that are designed to get answers that assess the potential effect of a disruption to the business.

People who should be interviewed or given the questionnaire include managers, team members, supervisors and others who are knowledgeable about the business processes. It can also include business partners and those working outside of the organization as long as they have sufficient insight. In other words, consider who your stakeholders are .

The information that you collect for your BIA report should include the following:

• The name of the process
• A detailed description of where the process is performed
• All the inputs and outputs in the process
• Resources and tools that are used in the process
• The users of the process
• The financial and operational impacts
• Any regulatory, legal or compliance impacts
• Historical data

3. Review the Information

All of this collected data must be documented and reviewed before the information is analyzed. This can be automated by computer or done manually, depending on which is easier, more reliable and practical in terms of formulating a conclusion.

This review accomplishes multiple objectives: it creates a prioritized list of business functions or processes, it identifies the human and technology resources needed to maintain an optimal level of operations and it establishes a recovery timeframe in which to recover the process or function and return it to normal.

4. Create the BIA Report

After this, you’ll want to document the findings. This is when the business impact analysis report is prepared. While the format is not regulated, it often follows the following structure:

• Executive summary
• Objectives and scope
• Methodologies used to gather data and evaluation
• Summary of findings
• A detailed finding on each department of the business (including their most crucial processes, the impact of disruption, acceptable duration of the disruption, tolerable level of losses, cost of recovery, etc.)
• Supporting documents and
• Recommendations for recovery

This document is then presented to management. The decision on how to proceed is in the hands of senior management, so they’re the ones who receive the report. Note that the business impact analysis is not set in stone. Technology, tools and processes change, and the business impact analysis must evolve with them.

The reason that every business should include a business impact analysis is that it’s a part of any thorough plan to minimize risk . All businesses can be disrupted by accidents and emergencies including a failure of suppliers, labor disputes, utility failures, cyber-attacks and not to mention natural or man-made disasters.

It’s not ideal to produce a response when one is in the midst of a crisis; a smart business has already prepared for these risks. A response created in dire straits will likely be arbitrary or random, and it will almost certainly be less effective.

With the due diligence of a business impact analysis in hand, a business has a well-thought-out plan of action to recover from adversity. It gives management more confidence in their decisions and judgments when responding to these events.

Prioritize Accordingly

The business impact analysis with allocation instructions prioritizes which operations need immediate recovery and which can wait. It also provides a set of criteria to test the recovery plans. Furthermore, it should identify lost income from the disruption, higher costs the business is likely to accrue if there will be any expenditure on fines and penalties, and the erosion of the business’s reputation and customer base.

All of this information is critical to a business’s success. Problems are part of the business landscape, and ignoring the possibility of some disruption to the process threatens solvency and long-term survival.

ProjectManager is project and work management software that’s great for businesses and we offer dozens of tutorial videos and blogs, templates and guides for your business management needs.

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Now that you’ve done the impact analysis, what’s next? The plan is the foundation of any successful project, but a plan needs tools to organize all of its different parts into a working whole. ProjectManager is an online work management software that’s built exactly for this purpose.

Once you have approval, you need to break down the project into tasks. Those tasks will each need a deadline, and they should be assigned to a team member to execute them. ProjectManager gives you multiple ways to initiate your project plan, from the more structured Gantt chart for long-term planning to the visual workflow tool of a kanban board .

But how do you get your spreadsheet into a project? With ProjectManager, that’s easy. You can upload your tasks and it opens as a new project. From the Gantt view, your tasks are plotted on a project timeline to give you the big picture and allow you to link dependent tasks while breaking the project into phases or milestones.

You can assign tasks from any project view and teams can work how they want to work. Team members like kanban boards because they have the necessary context and resources to work on what matters. Managers like the transparency kanban boards provide, showing them who is working on what.

Business impact analysis gives the project life, but ProjectManager gives that life a means to success. Practical and easy to use, projects are productive, making the work that you put into the analysis pay off.

A business impact analysis is a great tool to assess risk and set up a plan of recovery if and when it occurs. That sounds like a project. ProjectManager is project management software that helps you plan your business impact analysis and monitor and report on it when you need to execute it. There’s no risk to taking this free 30-day trial.

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Significant milestone as BHP’s SA copper plan set for assessment

Bhp has reached a significant milestone on a pathway that could see a more than doubling of copper production in south australia by middle of the next decade..

The State Government has made a declaration calling in BHP's proposed development to increase copper cathode production, and associated products, as an ‘impact assessed development’.

If approved, the proposed project would see a new, second copper smelting furnace built, which would augment and expand the existing facilities at Olympic Dam.

This upgrade would facilitate the processing of more materials from BHP’s portfolio of copper assets across South Australia, including Olympic Dam, Prominent Hill and Carrapateena.

In its FY24 full year results released this week, BHP also made a significant public statement about the size and quality of its mineral resource at its Oak Dam prospect, reinforcing the potential for South Australia as a leading copper jurisdiction.

BHP has outlined a strategy to further increase BHP’s copper production from South Australia from 322,000 tonnes of copper last financial year, up to 650,000 tonnes a year by the mid-2030s.

The assessment processes in place for impact assessed developments allow for the highest level of scrutiny under South Australian law, and can be aligned with the Commonwealth’s environmental assessment processes to ensure a robust scientific and technical assessment.

Attributable to Tom Koutsantonis

This declaration marks the beginning of a robust consultation and decision-making process.

It’s an opportunity for BHP to make a case for this proposal, and allowing the South Australian community to weigh up the benefits the project could bring against any economic, social and environmental impacts it could have.

It’s very encouraging to see BHP planning for ongoing significant investment in South Australia – as we’d expect, they’ve done a mountain of work before reaching this point and their public statements about the potential of this copper plan are significant.

However, we’ve been down this path before, and South Australians have a right to be sceptical. Following the assessment process, BHP’s final investment decision rests with them, and they have advised they plan to make a decision in the first half of FY27.

But we do know that this proposed development comes at a time when our state is ideally positioned to capitalise on the massive opportunity emerging in the global effort to decarbonise.

This proposed investment would align with the copper opportunity the Malinauskas Government has already outlined in the State Prosperity Project. Our state is home to more than two-thirds of Australia’s total copper resources, and its emergence as a Tier One copper province could ensure we have a significant role in meeting the predicted surge in international demand for copper required by the global energy transition.

For BHP, the proposal represents an opportunity to consolidate the huge investments the company has already made in South Australia’s copper assets and make significant returns to shareholders.

For South Australia, it could mean a huge boost to the value we add to the state’s natural resources right here in this state, meaning greater opportunities for South Australians.