Some entrepreneurs do not think they need a formal business plan – they keep it all in their heads. For a new business to succeed you need to be clear about your goal. You need to be good at what you do and you need to know your market. But you need the ability to adapt and be flexible and this can sometimes take businesses away from their core purpose.
Putting a formal business plan together is not just to provide reading for your bank manager. It is an exercise in defining your clear goal. The road to starting up a new business is not always an easy one and there will be diversions along the way. You need to be flexible and able to adapt to deal with these changes. Often being flexible dilutes the original purpose of what you set out to do. In times of change it is always useful to revisit your business plan to confirm that you have not lost sight of your goal.
A formal business plan can also help you to refine your business model. How well does your model cope with downturns in the economy? If income goes down do your costs reduce also? If you go into a period of growth do you have the resources to be able to deal with that growth?
Chris Lockhart, Chartered Accountant at Kent based CLL Accounting & Tax, can help you put together a business plan. Contact Chris for a free initial discussion.