Cayenne Consulting

Why Your Business Plan is Essential to Your Success

When you first come up with an idea for a product or service, you’ll ideally test the feasibility of your business concept. If your idea seems like it has a market, you’ll also establish how your business will make money. After you have completed these two foundation steps, you’ll want to define the path needed to move your product from concept to consumer. In more formal terms, you’ll create a business plan.

A Business Plan is Your Business’ Strategic Compass

A business plan can serve many purposes, such as enticing investors, getting financing from a bank, attracting a team to develop your product, help you rent space, outline marketing plans, and evaluate new initiatives.

By writing all of your business objectives down, it will help you see your business in a new, organized light. It will make it so others can see your vision and help you bring it into being. If your ideas and milestones are in your head or not organized in a centralized document, it will be challenging for your team to understand if your efforts and results are on track. Also, you’ll be more likely to avoid chaos and conflict in your business if everyone is working from the same plan.

A Business Plan is Also an Inexpensive Dry Run

Your business plan is like a blueprint for all aspects of your business. In it, you’ll revisit your feasibility tests, business model, and layout a strategy to achieve your goals within a certain amount of time.

The more you state in your business plan, the more your business plan will help you test assumptions and identify flaws in your concept. “A Business Plan is like a dry run to see if there is a major problem with your business before losing any money,” says Mike McKeever, author of How to Write a Business Plan.

What Goes Into a Business Plan

While there is no concrete formula for writing a business plan, here are the more common elements you’ll likely put in your business plan.

To illustrate the last point, the collapse of the US Auto Industry from 2008-2010 forced each of the three majors to develop new business plans to confront the changing economic and market environments. One good example is Ford’s Business Plan submission to Congress.

The Messenger

During a company’s existence, it will use the business plan for a variety of purposes, such as securing funding or entering into strategic partnerships. But most importantly, your plan conveys your message, your aspirations, and your commitment to all stakeholders. The Vision, Mission, and Value Proposition described in the plan underpin the business, and are at the core of why you exist.

As the Messenger, your plan will serve to:

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