Why Business Planning Is So Important

As a business owner, it’s more than likely that you’ll have heard about writing a business plan - perhaps you even have one (and, if you’ve started your business, you really should). But is it complete? Does it have all the information in it that you need? Because if anything’s missing, you might find it harder to move forward, even if it means spending more time on the plan and delaying the launch of your business. 

There are some major elements to include in your business plan, so let’s take a look at some of the main ones and discover why they’re so important so you can be sure you’ve got them in place. 

Financial Planning

Perhaps the most important element of any business plan (and certainly the one that any potential lender or investor is going to be interested in) is your financial ideas, calculations, and forecasts, so this has to be at the heart of your business plan, even if you’ve started the business for fun or it’s a passion project. The fact is, it’s going to have to make money if you want it to succeed and continue, otherwise every bit of effort you put in will go to waste. 

Some of the things you’ll need to consider and include when you’re thinking about how to add financial information to your business plan include budgeting, cash flow management, investment planning, and risk management, not to mention how you intend to pay back any borrowing or what return an investor might expect to see. Many people find this is the hardest part of writing a business plan, so it can be a good idea to speak to an expert for advice or find a mentor who can guide you to ensure you get it right. 

Succession Planning

This element might not be something you’ve thought about, and it can feel a little daunting or even morbid, but succession planning - that is, what you want to have happen to the business when you’re no longer running it - is crucial. Otherwise, the only thing that can happen is that the business closes and if that’s not what you want, you need to say so. 

Speaking to a wills and estates lawyer is a good first step because they can advise you on how to include your business in your will, which will save a lot of problems for those left behind once you pass away. But remember, succession planning isn’t just about what happens when you die; what if you want to retire or sell the business? What then? Good succession planning can take care of all that, ensuring you find a suitable successor, come up with a training plan, and help everyone settle into their new roles, so no matter what you want, this element is vital for your business plan. 

Operational Planning

All of the above might seem like things you need to deal with in the future, not right now, and to some extent that’s right (although the information does still need to be in your business plan), but what about your general day-to-day operations? That information needs to be included as well - or it could be, if you want to be thorough. 

Operation planning focuses on the general everyday things you need to do to keep your business running efficiently, and it ensures that everything is in place and can be done so you can focus on the core of your business. You’ll need to come up with systems, make sure you’ve got the right equipment and software, and have a plan about how and when to hire people. If all that’s included, you can get started with a sensible plan in place.