There are a multitude of articles to praise the positive effects of the business plan but on the contrary there are also a multitude of articles to decry the business plan! Regardless of the time you take to complete your business plan, your business plan is subject to the vagaries of time and changes. Why ? For the simple reason that it is, by definition, impossible to predict how a new activity will develop, if it will find its customers, how long it will take before it becomes successful. One can therefore wonder if it is really useful to spend time writing it.
The business plan: there is no simple case
You have already opened several clothing stores in various districts of Paris and you have the wish, in view of your success, to open stores in major French cities and therefore you use your business plan to model your new store and you follow scrupulously but you have forgotten that the clientele in the provinces is hardly identical to the Parisian clientele and there you come up against a major obstacle.
In conclusion, your business plan is already more or less false. But is that reason enough not to? The answer to this question is clearly “no” and for several reasons.
What does a business plan contain?
But let’s start by remembering what a business plan or business plan consists of? This is a document that explains in a structured way what the future entrepreneur wants to achieve, by when, with whom, with what means, aiming for what results and how his project can be viable and profitable. The project leader details in particular his future activity, his products or services, his market, the risks they incur and how he anticipates them, the major stages of development he envisages, the profitability model, the team whose he will surround himself.
The business plan: 4 good reasons to carry it out
By its nature, the business plan therefore makes it possible to meet 4 objectives:
- the 1st objective is, for the entrepreneur, to verify the viability of his project by ensuring that each aspect that composes it (legal choices, financial means, commercial strategy, industrial tools, communication media, human resources, etc.) has been the subject of of in-depth reflection, that the risks have been measured and solutions found.
- the 2nd objective of the business plan is to make it possible to obtain the financial resources necessary to launch and carry out the project. Whether it is a loan to finance the purchase of equipment or a need for financing a cash flow gap or the return of an investor to capital, it will be necessary to convince whoever has the money to place it in your company. But you are far from alone. The requests are overwhelming. Bankers and investors can therefore afford to make a selection based on their criteria: minimizing their risks while maximizing their profits. For this, they want to know where you are going and you will need to detail, argue, concrete and verifiable data in support, to obtain their support for your project. The business plan is used for this.
- the 3rd objective of the business plan is to convince your partners to trust you: a supplier, a service provider, an incubator that you want to integrate, etc. Everyone will want to make sure beforehand of the seriousness of your project: so reassure them, show them your business plan. Your professionalism will be an important asset.
- the fourth objective of the business plan is to allow you to follow up on your project. Feel free to update it over time and as you progress. It will serve as your compass, show you the direction to follow, to always remain in control aboard your ship.
Not making a business plan means taking the risk of making mistakes on several levels.
If you do not draw up a business plan, you therefore deprive yourself of the possibility of more thoroughly verifying the seriousness and viability of your project, of finding the financial resources necessary for the realization of your project, of convincing the partners whose need to follow you, to have a monitoring tool for the implementation of your project. Wouldn’t that be a shame?