Conversely, businesses without plans in place can often become overwhelmed by failures that occur within the business and may potentially fail due to the lack of provisions and safeguards put in place.
With good planning comes clearly set expectations, results tracking, and goal-setting.
A well-crafted business plan gives the appearance of seriousness, professionalism, and a dedication to hard work in the years to come – all of the things that investors want to hear and see before they invest their precious dollars in your company.
Serving as a tool to clearly outline and delineate your company and its objectives, having a business plan benefits your employees and partners while also creating confidence with investors by showing them that they will definitely see a return on their investment with you.
Therefore, buyers may not make the connection that your company is associated with what they desire to purchase.
Functioning to save future frustration, the strategic alignment methods put in place within a business plan remove any ambiguity and describe who and what your company is, the products and services it offers, and the customer base it caters to.
Strategic alignment is an imperative concept in the business world. For example, TJ Maxx sells discount clothing to budget-minded consumers, Sony sells top-quality electronics products to discerning buyers, and Five Guys sells premium burgers for food lovers seeking hot, fresh, and fast food.
All of the companies above have successfully aligned their product and service offerings with their intended audience.
Yes, technically, a traditional business plan has a strict set of rules and a template to follow. They change with time as you get to learn the market, your own business, and indeed, your very self.
That, however, does not mean that you are doomed to fail if you cannot clearly articulate what your cash flow statement is in the financial plan section. While it is important to learn how to write a business plan, the truth is – only a small subset of businesses still need to go through the formal process and follow a strict template.