You can probably get by without a business plan , but I wouldn’t advise that you try. Having a solid well thought out business plan provides the entrepreneur with several clear advantages in the competitive business environment. Listed below are some of the benefits of having a business plan:

• Business planning forces you to set goals , without goal setting you are doomed to fail. The business planning process ensures that the goals are achievable and realistic.




• Business planning requires that you take into account the business landscape that you operate in  , who your competitors , suppliers etc are. A thorough investigation of the regulatory framework will also enable you to get a better understanding of the business landscape.




• Requires you to focus on your strengths and weaknesses and how these interact and influence the business landscape and your long term goals.




• Requires you to focus on alternative scenarios and develop action plans to meet changing scenarios – the business landscape is dynamic and change is the only constant. Successful businesses are those that can adapt to the dynamic environment. Business planning forces the entrepreneur to think about possible changes and how to manage these changes whether they constitute a threat or a possible opportunity.




• A Business Plan enables others in the business to understand the vision and goals of the owners and management – It ensures that all players are on the same page.




• A Business Plan is required if you need to raise finance , whether it is from financial institutions like banks or venture capital finance. Even if you intend raising capital from family and friends a well thought out Business Plan makes the process easier and will also provide comfort to your investors.




• A Business Plan can be a measurement and evaluation tool , setting clear cut objectives and budgets enables you to measure and control business activities and makes it easier to rectify and divergences.




• It requires that you apply your mind and think logically and analytically about the business , this results in better decisions and forces you to think of issues that you might overlook.




• Helps you comply with certain statutory requirements like employment equity , if it applies to your business or is likely to apply to your business at some point in the future, you should incorporate it into your Business Plan.




• A well drafted Business Plan provides you with a better understanding of the viability the proposed business , if after conducting all the research and planning processes you begin to realise that it is not such a great business, you can pull the plug then and there saving yourself a great deal of money.




• A Business Plan is a dynamic tool and needs to be continually reworked as conditions change thereby forcing you to continually evaluate your business and the environment. A Business Plan should never be forgotten and filed once you have all the funding and your business is underway. The planning process is something that all successful entrepreneurs continuously do.

Many owners of SMEs mistakenly believe that their business are too small to need a Business Plan , the question they need to ask is whether their business is too small to fail. Business Planning significantly reduces the risk of failuire and all succesfull entrpreneurs are succesfull planners.

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