Business plans might sound unexciting and vague to some of us, but in this article I will explain why deciding on creating a business plan for owners of existing businesses, or even before starting your business, might be one of the best decisions you can ever make.

Let’s start by explaining what a business plan is and what the most common reasons owners of businesses and people who plan to start a new business decide on preparing one.

A business plan is a document that offers a complete overview of your business and the business environment. For example, a business plan for a restaurant will offer all the information about your restaurant in addition to information about the restaurant business in general in your location.

After reading a good business plan, the reader will understand your business idea, your operating process, your products/services, the exact profile of your clients, the industry in general including recent trends and research, competition, market potential and growth projections.

The business plan will also address your specific, and distinctive, advantages and will conclude with a detailed financial section that will introduce the results so far. More importantly, the projected results in the future of every business plan should include a five year cash flow projection that will allow the reader to really understand where the business is going and how much is it worth.

Most of the demand for the creation of business plans is a result of an urgent need to get investors to your business, apply for grants and get credit and loans. This is an important enough incentive to prepare a business plan. There is great opportunities out there to receive the funding needed in order to achieve the growth you are looking for. The minute you have a great business plan, you will get more active in trying to actually secure additional funds. Now you ready to apply, since the business plan is set.

Yet, there is an additional critical reason to create a business plan even if you are not trying to impress investors, or apply for grants and credit.

The reason is Strategy. Most business owners are spending so much time working in their business that they fail to work on their business, and preparing a business plan is exactly what working on the strategy of your business means.
Attending to urgent matters is crucial! There is always something that needs to be done, but research done on successful businesses shows that most of them invest a big amount of time on strategy and planning.

Preparing a business plan will force you into an important process that many owners avoid. It forces you to think; think about where your business is going, who are the real clients, what are the objectives for the coming years, how would the financials look like (something that will help you make decisions on investment and expansion) and it will also allow you to know how much your business is worth.

You might be thinking, “That’s all great, but I am hiring a freelancer to get the job done, so I won’t be very involved in the process other than receiving a final document”.

Well, nothing can be further from the truth. A great business plan can only be created with the active involvement of the owner! Your consultant has the necessary experience to guide you through the process, yet you are the one who has the real passion for the business/idea and the amount of knowledge accumulated by you makes your input invaluable.

Your involvement will create a priceless process of dealing with the most important strategic issues that will allow you to get the necessary focus and understanding on how to navigate your business in the best way to achieve success.

It is almost tempting to try doing it on your own, but a good consultant can get the plan to the next level. By organizing all the input from you in the best way possible, consulting with you and sharing their experience with you, their knowledge from past projects they have completed can make your business plan stand out. Preparing the parts which requires certain skill and experience, such as the Market Analysis section (that involves some research abilities) and, most importantly, the financial part (which is a critical section in your plan) should be done by a professional since it requires excellent excel skills and good financial understanding.

So, to sum it all up: “Who needs a business plan?”

If you are an owner of existing business, you need a business plan in order to allowing your business the option to raise money by investors, grants and loans. More importantly, the process and the result will allow you to take a good look on their business as it is now, decide on where you want it next, and start moving it in this direction.

If you are only starting your business, creating a business plan is also a great idea since new businesses usually lose money in the first year. Sometimes a business might require additional funds by investors, loans or grants to cover the deficit until reaching the breakeven point. Remember that persuading people to give you money is always a difficult task and that’s where an excellent business plan comes in to the picture.

Strategy is also a crucial factor if you are trying to establish a new business. A business plan will allow you to examine the real demand for your product, increase your know how on the industry, and allow you to understand your projected cash flow. Some of my best experiences while preparing a business plan for a new business happened when the client understood that the business they were trying to establish would not be worth the investment. Some of them decided to back off and not open the business, thus saving them a great amount of money. Most of them made changes to their business model, an example would be by deciding to target a new profile of clients or finding a new way to differentiate their products in a way that will increase sales. These owners achieved success.

In conclusion, if you are running a business or are thinking about starting one, a business plan will greatly boost your chances of success. In Elance you can find a wide selection of top providers that will help you to get the job done.