₦airaland Forum

“The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” Robert Kiyosaki

There’s no shortage of remarkable ideas, what’s missing is the will to execute them.” – Seth Godin

Writer and former dotcom businessman, Godin is saying that talk is cheap, but in a nicer way. Yes, ideas are a dime a dozen, but the real meat on those bones comes from trying to realize them. It is only then that the problems show up and the real work of resolving them starts.

“And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom.” – Anaïs Nin

Nin was no stranger to the creative act. As a writer, she had to take pen to paper or her stories would remain phantoms in her mind. It is safer to keep these ideas to oneself. There’s no rejection or criticism that way, but there’s also no way to hone one’s skills and produce something of value.

“And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom.” – Anaïs Nin

Nin was no stranger to the creative act. As a writer, she had to take pen to paper or her stories would remain phantoms in her mind. It is safer to keep these ideas to oneself. There’s no rejection or criticism that way, but there’s also no way to hone one’s skills and produce something of value.

There’s no shortage of remarkable ideas, what’s missing is the will to execute them.” – Seth Godin

Writer and former dotcom businessman, Godin is saying that talk is cheap, but in a nicer way. Yes, ideas are a dime a dozen, but the real meat on those bones comes from trying to realize them. It is only then that the problems show up and the real work of resolving them starts.

“The real test is not whether you avoid this failure, because you won’t. It’s whether you let it harden or shame you into inaction, or whether you learn from it; whether you choose to persevere.” – Barack Obama

The president knows a lot about failure and success. The Affordable Healthcare Act was more than once dead in the water, but the president didn’t give up. He compromised, he convinced and he labored, but not once did he allow himself to become embittered.

“Forget past mistakes. Forget failures. Forget everything except what you’re going to do now and do it.” – William Durant

There is only the present, so the enlightened ones tell us, and we cannot allow ourselves to become tied to the past or enchanted by the future. There is only the here and now. We must concentrate on that and act. This quote doesn’t reject the lessons of the past or the plans for the future, but we only have this moment, so do your best in it.

“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired and success achieved.” – Helen Keller

People should take failure as a badge of honor. It’s a crucible that burns things down to their essence and shows us what we’re really made from. If the path to success was clear, then everyone would be one it and success would lose all meaning.

“Never test the depth of the river with both of your feet.” Warren Buffet

“You only have to do a few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett

The idea of right and wrong is a construct, of course, and it might feel overly simplistic to suggest that making the right choices will smooth the path forward. But the famous investor is merely noting with this business quote that avoiding a wrong decision is as important as making the right one. Avoiding bad decisions is aided, of course, with careful planning.

“To be a successful business owner and investor, you have to be emotionally neutral to winning and losing Winning and losing are just part of the game.” Robert Kiyosaki

Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way. 

Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans. Before we get into the thick of it, let’s define and go over what a business plan actually is.

What is a business plan?

A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.

Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success.

Why is a business plan important?

A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.

Business plans typically include detailed information that can help improve your business’s chances of success, like:

A market analysis: gathering information about factors and conditions that affect your industry

Competitive analysis: evaluating the strengths and weaknesses of your competitors

Customer segmentation: divide your customers into different groups based on specific characteristics to improve your marketing

Marketing: using your research to advertise your business

Logistics and operations plans: planning and executing the most efficient production process

Cash flow projection: being prepared for how much money is going into and out of your business

An overall path to long-term growth

10 reasons why you need a business plan

I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”. 

The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.

To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.


1. To help you with critical decisions

The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.

Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.

Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.

2. To iron out the kinks

Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.


3. To avoid the big mistakes

Only about half of small businesses are still around to celebrate their fifth birthday. While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.

According to data from CB Insights, some of the most common reasons businesses fail include:

No market need: No one wants what you’re selling.

Lack of capital: Cash flow issues or businesses simply run out of money.

Inadequate team: This underscores the importance of hiring the right people to help you run your business.

Stiff competition: It’s tough to generate a steady profit when you have a lot of competitors in your space.

Pricing: Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.

The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis, every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!

4. To prove the viability of the business

Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.

Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.
A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.

5. To set better objectives and benchmarks

Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.


6. To communicate objectives and benchmarks

Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.

Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.


7. To provide a guide for service providers

Small businesses typically employ contractors, freelancers, and other professionals to help them with tasks like accounting, marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.

8. To secure financing

Did you know you’re 2.5x more likely to get funded if you have a business plan? If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.

9. To better understand the broader landscape

No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.


10. To reduce risk

Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.


Understanding the importance of a business plan

Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.

Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.

. “Wise spending is part of wise investing. And it’s never too late to start.” Rhonda Katz

“If you buy things you do not need, soon you will have to sell things you need.” Warren Buffet

There’s no shortage of remarkable ideas, what’s missing is the will to execute them.” – Seth Godin

Writer and former dotcom businessman, Godin is saying that talk is cheap, but in a nicer way. Yes, ideas are a dime a dozen, but the real meat on those bones comes from trying to realize them. It is only then that the problems show up and the real work of resolving them starts.

“If you want to be truly successful, invest in yourself to get the knowledge you need to find your unique factor. When you find it and focus on it and persevere your success will blossom.” Sydney Madwed

“Success usually comes to those who are too busy to be looking for it.” – Henry David Thoreau

Philosopher, naturalist, essayist, etc.—Thoreau knew a thing or two about productivity. He wisely saw that those who are seeking success are more likely romanticizing the idea and not doing the hard, practical work necessary to achieve it.

“You only have to do a few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett

The idea of right and wrong is a construct, of course, and it might feel overly simplistic to suggest that making the right choices will smooth the path forward. But the famous investor is merely noting with this business quote that avoiding a wrong decision is as important as making the right one. Avoiding bad decisions is aided, of course, with careful planning.

“And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom.” – Anaïs Nin

Nin was no stranger to the creative act. As a writer, she had to take pen to paper or her stories would remain phantoms in her mind. It is safer to keep these ideas to oneself. There’s no rejection or criticism that way, but there’s also no way to hone one’s skills and produce something of value.

Invest in yourself, you can afford it, trust me.” Rashon Carraway

“Wealthy people invest first and spend what’s left and broke people spend first and invest what’s left.” Anonymous

Landlords grow rich in their sleep without working,risking or economising".~John Stuart Mill..

“If you want to be truly successful, invest in yourself to get the knowledge you need to find your unique factor. When you find it and focus on it and persevere your success will blossom.” Sydney Madwed

“Success is often achieved by those who don’t know that failure is inevitable.” – Coco Chanel

If you’re keeping your eyes on what can go wrong, it will go wrong. Successful people strive to move on. They aren’t ignorant of failure, but they’re also not stymied by it. They don’t know what failure is, because to them it’s merely a bump in the road, not its terminus.

“Do something today that your future self will thank you for.” Anonymous

“And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom.” – Anaïs Nin

Nin was no stranger to the creative act. As a writer, she had to take pen to paper or her stories would remain phantoms in her mind. It is safer to keep these ideas to oneself. There’s no rejection or criticism that way, but there’s also no way to hone one’s skills and produce something of value.

There’s no shortage of remarkable ideas, what’s missing is the will to execute them.” – Seth Godin

Writer and former dotcom businessman, Godin is saying that talk is cheap, but in a nicer way. Yes, ideas are a dime a dozen, but the real meat on those bones comes from trying to realize them. It is only then that the problems show up and the real work of resolving them starts.

“Success usually comes to those who are too busy to be looking for it.” – Henry David Thoreau

Philosopher, naturalist, essayist, etc.—Thoreau knew a thing or two about productivity. He wisely saw that those who are seeking success are more likely romanticizing the idea and not doing the hard, practical work necessary to achieve it.

“You only have to do a few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett

The idea of right and wrong is a construct, of course, and it might feel overly simplistic to suggest that making the right choices will smooth the path forward. But the famous investor is merely noting with this business quote that avoiding a wrong decision is as important as making the right one. Avoiding bad decisions is aided, of course, with careful planning.

“And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom.” – Anaïs Nin

Nin was no stranger to the creative act. As a writer, she had to take pen to paper or her stories would remain phantoms in her mind. It is safer to keep these ideas to oneself. There’s no rejection or criticism that way, but there’s also no way to hone one’s skills and produce something of value.

. “Do not save what is left after spending but spend what is left after saving.” Warren Buffet

“Business opportunities are like buses, there’s always another one coming.” – Richard Branson

Branson’s Virgin has proven that from record labels to airlines, where there is a will there is a way. The door isn’t always open, but sometimes it’s ajar or the key is on the floor. All you must do is pick it up and turn the lock. Basically, the right environment for success ebbs and flows, but a keen businessperson is never passive.