How Important Is a Business Plan?
A business plan is a way to communicate your vision for a business before you start it up. It can also be used at critical times during the business’ lifespan. A business plan has several key functions: it can set goals and metrics for success, and help you to define what you need from your employees. It will remain a crucial reference document throughout a business’ early growth, and any time it enters a period of transition and development. These periods also represent an opportunity to create a new business plan, if you need to set a new direction in stone.
One of the most important functions of a business plan is attracting investment or finance, especially during the early stages of your company. You will need to provide a business plan to secure business loans or other types of start-up funding. Beyond this, it is a useful internal document that can keep your business and your decision-making on track. As such, you must know what this document is for and how to write one.
Do I need a business plan?
It is always a good idea to create a business plan. If you are seeking outside investment, you will need one. If not, it is still important to create one as it will clarify your idea for your business, set key goals, and prepare you for the unexpected.
The right business plan will give you confidence in the viability and growth potential of your business venture, and help you make decisions that will support success. It can help you to identify any areas where you need to make additional preparations before your business launches, and highlight any financial risks that might arise. Once you have articulated your goals, it will also be easier to push your business towards growth and remain viable over the long term.
With a fully costed and accurate financial plan, you will have a blueprint for success. Business plans can also be used to diagnose any problems that arise, and keep you and your employees working towards your intended goal.
A business plan is also useful if your existing company enters a new stage of its lifespan. For example, if you acquire or merge with another company, a new business plan will communicate the objectives of the business in its new form and make sure workers and processes are aligned. This reduces the risk of disputes arising later, and will help you to evaluate the vital financial implications of transformative decisions.
Creating a business plan
The structure of a business plan can be flexible. It should be structured in a way that makes sense for your purposes - for example, a document prepared for investors should have estimates of the company’s growth potential and other financial details, while a document setting out your company culture does not need this information. As such, it is important to consider what you need before you set out to develop your plan.
Your business plan needs to be accurate to effectively outline your business’ prospects and estimate its growth potential. Cash flow orecasts and other financial projections in particular must be accurate. If you are starting your first business, moving to a new industry, or have a limited knowledge of the wider market, it can be difficult to produce realistic and fully costed plans to act as a roadmap for your business’ success. In these situations, you should work with an experienced accountant who understands the structure of your business and the legal and regulatory requirements that will apply.
The accountants at Monetta have specific experience of a variety of UK industries. This means we can advise you on any unique requirements or rules, tax exemptions and other savings that will apply. Thanks to our experience with business plans, we can also guide you on business structures, ways to work with other businesses to save money, and approaches that will allow you to operate more cost-effectively.
Working with a financial expert from Monetta can give you confidence in your business plan and ensure it meets your needs, along with those of your business and your investors. We can also make sure you consider every angle carefully, which will set you up with the best chance of success in your new venture.
Contact Us
To learn more about how we can help you develop an accurate, realistic and costed business plan, call your local Monetta office or complete our enquiry form.
Visit our team page to find out more about our expert advisers. Remember that every situation is different, and the examples given above are only designed to illustrate the possibilities of a business plan. Call the Monetta team for bespoke advice tailored to your specific needs.