Small business tips series: Is it worth writing a business plan?
If you want to raise money it’s essential to have one. But if you don’t what’s the point? Isn’t a business plan just like a New Year resolution – likely to be ignored or broken?
Even if you’re not wooing investors, writing a business plan can be good to help refresh your memory about why you’re in business. Just a few bullet points on what your small business is about, what its goals are and how you plan to achieve these will help to keep you focused.
Also, if your company expands, your business plan will ensure your employees are all pulling in the same direction.
Here are a few tips on how to write the perfect business plan:
Keep it simple
If it takes you hundreds of words to explain what your small business is about then either you don’t know the answer or you don’t get the question. It’s all about what gets you psyched about your business. You should be able to state that in no more than a dozen words.
Every business needs a direction, so it’s always good to pick a point on the horizon that you can navigate towards. That point can be anything: a revenue target, a number of new stores, or to be #1 in a customer survey. Remember to be realistic: don’t make the goal too easy or too difficult to achieve. It should incentivize, not demoralize you.
Get your numbers straight
If you think you may either want or need small business funding this year then your business plan must include solid financial goals, as well as operational and aspirational ones. Make sure you have a firm grip on your financial position in terms of what your business will make this year, as well as what it will spend. Again, be realistic. That will give you a profit target, which you can use to try to attract investors.
Keep working at it
There’s no point in having a business plan that simply gathers dust on the shelf. Keep going back to it during the year to measure what progress you’re making and, if necessary, tweak it in response to what’s happened to your business.
Don’t forget the risks
It’s great to focus your business plan on all the opportunities you hope to grab in the coming year. But it’s important, too, that you to look out for any potential storms on the horizon. What are the risks to your business and/or are there any new perils compared to last year? Remember: you don’t need to deal with all these risks on your own. That’s what small business insurance is for: to take away those heart-stopping moments when you’re floored by something totally unexpected. It’s essential that you have the right small business liability insurance for your company. Having professional liability insurance (errors and omissions insurance), general liability insurance or business owner insurance policies that meet your individual business’s needs can protect it from claims that could leave your business plan – and perhaps even your business – in tatters.