Why Is A Business Plan Important UK?  31 Sep 2007 Why Is A Business Plan Important UK? Richard Holden - Franchise Manager Lloyds It is often said that if you fail to plan, then you plan to fail and this is certainly the case when it comes to running a business. Preparing and presenting an effective business plan can make all the difference between success and failure as it can be used to convince prospective lenders, investors and customers that you have thought through your ideas, and that they are dealing with a business which has good potential. A business plan is a written document that provides an overview of the business, your objectives, market, management team and financial projections. It is often assumed that a business plan is just used to secure funding for the business. Whilst this is an important benefit of producing a business plan it can also assist with the management of the business such as monitoring the ongoing performance of the business against the original benchmarks and the identification of areas for development. The plan is a working document and should be regularly reviewed and updated as the business develops. A business plan also demonstrates that you understand the business opportunity and unsurprisingly, a bank will only lend when it has a very good chance of being repaid. Banks can provide a business plan template for you to use. Accountants and Business Link advisors can also provide advice in producing a business plan but remember it is your document and is too important to leave to someone else to write. A plan should therefore help you in four main ways: It gives your business a sense of direction. It convinces others that you have a sense of direction. It helps build commitment because you have publicly announced your objectives. It gives you something to measure your progress against - helping you identify issues early on and take appropriate action. Those who understand the benefits of business planning are more likely to be successful than those who react to day to day operational issues and are constantly fire-fighting problems. But planning a business is not a simple matter of scribbling down a few ideas. If a franchisee is going to make their plan work, a much more thorough approach must be adopted. A business plan is a useful tool to help gather thoughts and to set objectives for the business. It should demonstrate that there is sufficient demand for the product or service offered, that there is a good understanding of the market and to set out the competitive advantage or unique selling point that the business may have. Presentation of the plan is important to create maximum positive impact and you should practice delivery of your plan before speaking to a lender so that you come across professionally. Think of those entrepreneurs on BBC's Dragons Den programme. From the outset many don't stand a chance of securing the investment they are seeking because their presentation is poorly conceived or they don't have a good understanding of the key financial information for their business. Consequently they are unable to establish their own creditability and project confidence in their business. Careful planning and preparation should place the franchisee in a better position to raise the required finance from a lender and to operate their business successfully. The business plan is the most effective way to crystallize your business objectives and provide a sense of direction. Used in the right way, a business plan is an essential tool; however, crucially no business plan should be set in stone and should be regularly reviewed as the business develops.

Home Find an Opportunity Promote an Opportunity Resources Contact Us Subscribe

www.intergage.co.uk