Why you need a business plan

In this first lesson I'll look at the reasons that you need a business plan - this may sound boring and you just want to get on with it, but let's look at what happens to companies that already have business plans...

1: More companies stay in business

Studies by organisations such as business link show that companies that are in business and generate higher than average profits mostly have a business plan that they follow.

2. You can understand what to do

Not knowing why things go wrong, why customers don't buy or return, why your competitors are better or more respected than you is a recipe for disaster.

Your plan will help you analyse your business

3. You can allocate finite resources

No company can do everything. You will need to prioritise the work required in the coming year.

Choose no more than 7/8 key projects to work on and you will see the results.

4. You will understand your finances

If you are always overdrawn at the bank or find it difficult to get new finance then you'll need to forecast your sales and costs. But what are they?

Work all of this out with your plan.

5. Everyone is aware of your plans

You and your staff, bank manager and other interested parties all need to know the direction your company is going.

This is important to pull everyone into the same direction and develop good teamwork.

It also saves some people doing things that are not priorities in your business.

These are the five key areas.

Planning helps you understand your business. It can be frustrating when there are no customers about and you don't know why.

Planning helps you look at your own business and the businesses of others to get the best of everything.

All the best

Peter Hale
www.teneric.co.uk

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