An idea without a plan is like a bird without wings; it might sound pretty, but it never gets off the ground. There’s a lot that sets humans apart from the animal world – our imaginations and the ability to plan for the future are two of the things that make us stand out. A business plan turns ideas into a cohesive, actionable strategy and we’re going to go into a number of tangible benefits business planning brings. A quick note before we begin – there’s a common misconception that business plans are just for start-ups – they aren’t. This post will delve into why business plans can be useful at all stages of a business’s life:

They’re Great for Securing Investment

There’s a lot of things investors want to know, from how much experience you have in the industry to what you offer that your competitors don’t. They’ll also want to take a detailed look at your financials; after all, they’re investing to make money. Business plans, of course, include all of the above, and more.

A good business plan will include exactly why you got into the business and how long you’ve been at it. You’ll also often find a detailed SWOT analysis, a thorough evaluation of the market and your marketing, as well as a tidy description of your financials including current streams of revenue, assets and liabilities, as well as projected growth. In other words, a business plan includes everything investors are looking for – that’s great for start-ups and wonderful if you’re looking to secure a bit more funding for a new project or to accelerate growth in an already established business.

They Help You Plan for the Future

Business plans enable you to look holistically at all of the elements that are essential to your business’s operation. This allows you to detect potential problem areas as well as areas where you can grow – in other words, it sets you up for the future. You can use your business plan as a step towards creating a business continuity plan which enables you to keep operating even after natural disasters or other serious setbacks.

You can also use your business plan in order to monitor financial trends, from big to small. In your budget, you might notice that you regularly need to buy more pens and pencils, or that you constantly need heating and cooling repair. To mitigate these costs, you could buy more office supplies in bulk or consider investing in a new heating or cooling unit – when you have the complete picture, it’s easier to mitigate risk and eliminate unnecessary overhead.

They Help You Understand Your Business Now

The role of the CEO is rapidly changing; whether you have an official C-suite title or you’re running a business under your own name, the buck stops at you. There’s a lot to know about any business, and you want to know as much of it as possible so you can make the best decisions. That means getting on the floor and talking to front-line employees, your production team, various stakeholders – whomever you can. Another effective way of knowing all there is to know about your business is – you guessed it – creating a comprehensive business plan. You’ll need to talk to a lot of stakeholders to create a plan and that will give you a great idea of where you are and where you want to go. What’s more, you’ll be able to assess what your current liabilities and assets are – this can help you get the right kind of professional business insurance, because you’ll know exactly what the total value of your business is, and what needs to be insured.

Of course, you’re not the only person who is making decisions in your business – whether you’ve got a number of teams and managers, or you only have a few employees, giving others access to the business plan can help them make informed decisions. Your business plan will clearly delineate the managerial structure of the business so everyone will know what their responsibilities are. What’s more, you can let managers and employees know about the grand strategy so they better understand their own individual goals within the big picture.

They Help You Communicate

Everything we’ve talked about so far, more or less, leads up to this – business plans help you communicate exactly what your business is – to yourself and to others. Now, there’s advantages to doing that with potential investors and employees, no doubt, but it can also be helpful to communicate with others in the business world. You can take your business plan to someone with experience in the industry, like an advisor, in order to get a better idea of how to move forward. You can even bring your business plan to friends and family in order to get outside input on the business. Outside-in strategies can be quite an effective way of motivating business growth and that means getting input from all different types of stakeholders in your market.

Using your plan can also help you communicate key ideas to the rest of the business community, as well as give you the ability to compare your plan to what’s been revealed about the business plans of your competitors. Information, or the lack thereof, is the key of any grand strategy and a bit of choice information from your business plan, made public, can give you a lot of leverage.

They Help You Define Success

You know where you are now, you know where you want to be in the future, and you’ve communicated your ideas to the people who need to know about them. What is your business plan doing? It’s creating a roadmap to success and it’s helping you get to where you need to go. You can use your business plan to set achievable goals and get feedback on the goals you set, reworking them if necessary with input from stakeholders. That’s why a good business plan is useful at all stages of a business, whether you’re just getting started or you’re looking to sell. No matter what success means to you, a business plan will help you define it – and get it.