What is the Purpose of a Business Plan?

BUSINESS PLANS

Have you ever considered the questions, “What is the purpose of a business plan, and how critical is it to your success?” As a business coach, I have met and worked with hundreds of business owners over the years who insist that having a business plan is critical. I have found, however, that most are missing the whole essence of the business plan purpose.

Too many young companies are too eager to dive in head first, without first considering where they are going and what they hope to accomplish. While enthusiasm is certainly an asset, there is also something to be said about the importance of planning and having an organized set of goals you are striving for. Business plans are the foundational tool that allows emerging businesses, or established businesses thinking of taking a new direction, to get a grip on their company’s trajectory and build a clear understanding of the steps they need to follow to reach their goals.

WHY DO YOU NEED A BUSINESS PLAN?

Business plans come with a wide range of different benefits that will make themselves apparent in the short and long term. Before starting out, consider a few of the following, and understand how today’s planning can lead to tomorrow’s success.

SOME OF THE MOST IMPORTANT BENEFITS BUSINESS PLANS OFFER ARE:

Clarity

As we know, sometimes putting goals into writing is the best thing we can do to gain a firmer understanding of them.

A strengthened commitment to goals

A well-made business plan will not only clarify outcomes, but increase your sense of attachment to the process.

Process-building

Laying out the entire process will let you find details and potential problems that you might otherwise have missed.

A new perspective

Taking the time to really look at the strengths and weaknesses of your company will let you understand it in ways you hadn’t previously considered.

Results

The end goal of a business plan is to create a more functional, more efficient business.

WHAT IS THE PURPOSE OF YOUR BUSINESS PLAN?

The purpose of a business plan is to successfully and strategically achieve your company’s goals and objectives. A business plan will align the organization by clarifying, prioritizing and improving the commitment to goals. The outcome of a good business plan is better results and an increase in profit.

But here is the real question “What is more important to you when developing a business plan: the output, the process, or the outcome(s) of your business plan?”

If you tell me it is the outcome(s) you are most concerned with, what do you mean by outcome(s)? Outcome is just another word for purpose.

OUTCOMES OF A BUSINESS PLAN

Here are examples of outcomes that leaders typically want from developing a business plan.

– Better results (e.g. revenue or profit growth)

– New ways of approaching the business so it does not stagnate

– Improved commitment to goals

– Clarified goals

– Prioritization of goals and objectives

– Creation of alignment across the organization

– Creation of a process for holding people accountable

WHY DO BUSINESS PLANS FAIL?

In my experience, if your business plan does not lead to the desired outcome, it is because you and your leaders have not given enough thought or commitment to the following three questions

What outcomes do you want to cause from your business plan?

– Is there a better process for going about your business planning?

– What output needs to be produced from your business planning process so that you can drive the outcomes you want?

USE A PROVEN BUSINESS PLANNING PROCESS!

The One Page Strategic Plan created by Verne Harnish has all the key components of a business plan. With the business coaching services offered at Activate Group, we can maximize your team’s success and simplify the entire business planning process for you.

Contact us for a free consultation to learn how we can help your organization, or check out the testimonials page for stories from other leaders we have coached.