Dear DrFonda, I do not need funding, do I still need to a business plan?
Thank you for your question. Many people think that the sole purpose of a business plan is to secure financing. Obtaining financing is the most popular reason why entrepreneurs or business owner write a business plan; however, that is not the only benefit of having one. There are multiple way you may use your business plan, four include: check feasibility, secure key individuals or contracts, obtain financing, and track progress.
To illustrate the business plan uses, I’ll use a new restaurant as an example. Please remember the uses apply to any type of business.
Imagine that you have developed a new restaurant format; this idea will revolutionize the restaurant industry. But you are not quite sure of the potential market. In the process of researching and writing the business plan, you will gain a better understanding the idea, the market potential, and the existing competition. Uncovering any flaws will give you the opportunity to make adjustments before you start the business.
Secure Key Individuals
Let’s say you are opening a restaurant and have your eye on a famous chef. You can take your business plan to the chef and convince her that your restaurant is the place she wants to be. After she reviews the business plan, she immediately signs up to be your head chef.
Convincing key personnel is not the only way to use the plan as a sales tool. The business plan can be instrumental in obtaining a partner, securing an advantage from a key supplier, or convincing a potential client that you will be a great supplier.
You have worked out all the kinks of the idea and you have tentative commitments from key people. Yet, you review your financial situation and realize that you need to seek funding. You talked to a few people about investing in your restaurant. Everyone you talk to from bankers, venture capitalist, to even your rich aunt to wants to see your business. plan Since you have done the research and worked out all the kinks, you show them your plan with confidence.
You have big plans for your restaurant empire. One goal is to open five restaurants in the next three years. By adding your objectives and milestones in your business plan, you are can use the plan to compare your progress and to monitor your performance.
A Reality Check, A Sales Tool, A Progress Tracker, An Financial Request
Although the most common use for a business is to request financing, a business plan has multiple uses. You may need it for all four uses or for just one. It is your document. Consider what you will need for your business;,then use the plan to help you succeed.