Business planning has evolved since the 1990s.
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During that time, the dotcom boom was in full swing and the primary purpose of business planning was to gain significant funding.
While business plans are still used today to get funding, this is no longer the primary reason for writing a business plan.
The new trend in business plans harkens back to the original purpose of a business plan.
Now, there is a growing recognition among managers and executives that a business plan is a tool for defining and refining the way they do things in their respective companies or organizations.
Leaders of organizations are using business plans to manage internal programs and processes, instead of not just for a one-time occasion like securing a small business loan or landing funding from a venture capitalist firm.
Why is it essential to have a thorough business plan in place?
As an entrepreneur or small business owner, having the ability to create a sound business plan demonstrates to possible investors, venture capitalists, and future executive hires that the company or organization has been built on a solid foundation—that all facets of the business have been carefully thought out.
No business plan can be classified as fundamentally sound, if there was no SWOT analysis performed.
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a small business or startup company. Are you able to identify all four aspects within your company? In addition, stating exactly the goal of the company or organization and analyzing the internal and external factors that could prove either favorable or unfavorable are also involved in a SWOT Analysis.
Even though the SWOT Analysis requires going through all the intricate details and fundamentals of your business, it helps you, as an entrepreneur, gain a real understanding of the obstacles and potential threats that lay ahead. As a consequence, you are able to prepare for it by addressing it in your business plan.
Business planning software now makes business planning a little easier. However, it must be remembered that creating a business plan through various software for business planning must be done carefully and thoroughly.
Notably, using business plan software programs allow small business owners and entrepreneurs to concentrate on the essential financials of the company. Failure to pay attention to good financials will lead to confusion on where future business will come from, how they can augment profits and revenue, and what is the bare minimum cash the company needs to survive. Furthermore, a detailed cash flow analysis allows entrepreneurs to determine which activities have financial priority.
Without a doubt, this process of financial analysis is truly one of the most important aspects of business planning. Having good business planning software saves so much time and makes planning so much easier. Even established companies use cash flow analysis on a regular basis to determine its financial situation if circumstances change or if they are considering using capital investments and other expenditures.