A business plan gives direction to a business. Without a proper plan in place, daily business operations tend to be haphazard and management decision to be reactive instead of proactive. Below listed are the main reasons why a business plan is an essential tool for management of whatever size of company.

1. Direction: A business plan aids in managing the business more effectively. Committing thoughts to a plan helps clarify directions and specific steps that need to be taken to improve the current situation. Specific objectives would be outlined, together with the plans that need to be put into place to achieve such objectives. Thus a plan would help you understand your business needs in more depth and therefore could be an important tool in the long run success of the business.

2. Financing growth: Financing is one of the main uses of a business plan. Presenting a financer (being either an investor or a lender) with a good business plan outlining objectives, strategy, income projections and the way these will be financed, often make the difference between obtaining the desired finance and not.

3. Monitoring Working Capital: Most businesses go bust not because they are not profitable, but simply because they are insolvent. Business opportunities dictate that to generate future income, cash usually has to be invested upfront. Also a cash injection might be needed further down the line to change obsolete assets. A business plan would enable you to anticipate future cash needs and act now upon securing them.

4. Develop and communicating a plan of action: A good plan ensures that management focus on the core plan to obtain objectives. This would in turn ensure each player knows what need to be done and who needs to do what in order to reach the goals set. This would the enable management to set target for their teams and give a benchmark to measure the business and employee performance

With our experience of drafting business plans in Malta and abroad, at FirmsForSale.com we can assist you to prepare a business plan for you business, and thus giving you the essential tools to move your business in the right direction of long term business success!

Going through the process of a business plan as a start-up isn’t essential solely for the purpose of raising capital. A business plan will help you consider all the factors that will affect your business in detail. This will inevitably lead you to discover aspects of your business that you had not considered thus saving time and money as you would be able to deal with issues before they become real problems.

Now, say you have a business that is already up and running. The first thing that comes to your mind is, why bother going through the process of a business plan now? Our usual reply is ‘Are you sure you are getting the most out of your business?’ Yes, businesses are going to be profitable with or without a business plan. How profitable and how you maximise the use of resources is another story. Going through the process of a business plan would help you find problem spots and identify potential opportunities to exploit. It will give you a better knowledge of your market, clientele, assist you to rethink your management structure and marketing strategy to enable you to maximise your return.

Finally a business plan must not be the source of an ego boost. A business plan should be used as reality check. It should be simple, specific, realistic and complete. Any of these 4 attributes are missing and your plan is going to lose its purpose, and thus its value, to you, potential investors and staff. A good business plan is no guarantee of success, but to a business man with a good idea, it surely increases the odds!

Contact us on +356 21 373330 or email info@firmsforsale.com for a consultation. Also visit our research section for interesting write ups on the dos and donts of writing a business plan!