Business plan

When the place is found where you totally lost your heart, it's time for the hard work: writing the business plan. You could just jump into the marketed without a business plan but if you know that 90% of all start-ups fail it's better to start prepared. According to various studies not having a business plan or a weak one is one of the key reasons that businesses fail. Therefore I want to explain to you the importance of a business plan. I could probably write a thesis about why an business plan is a must for any business. But i'll just give some of the key reasons for having a business plan.

1. Viability of the idea
2. Seeing opportunities and threats
3. Planning and organisation
4. Secure funding
5. Accountability

Viability of the idea
We all love to think, dream and play perfect scenes in our head. This is something I really encourage but before making serious investments in your idea you should first check if it's viable. The first part of the business plan is the marketing analysis, a tool that will help you see if there is place for your idea.

Seeing opportunities and threats
Imagine that you have a business, it's working really good and you have money enough to expand. But before starting your business you haven't thought about what to do next. So you find yourself in the situation that or there are little or none possibilities to expand or the cost is really high because you haven't thought about it from the start. While it is better to start small you should think big for the future. At the same time you have to know where it could become difficult. A tool that I used to do this is the SWOT* analysis.

*strengths weaknesses opportunities treats

Planning and organisation
Running a business needs without doubt a good planning and organisation. It's like running your own little world. Writing down a detailed planning will make you notice when you are behind and give you enough things to do when you are ahead of schedule. Organisation especially in a hostel is so important! I've slept in hostels that have really good organization written down and in hostels that have no organisation written down. Trust me the ones that have it not written down lose a lot of money and have more unsatisfied customers.

Secure funding
One of the biggest uses of a business plan is the fact that it can drag possible investors over the line. Investors want to see that you are serious, that you have a plan. When a possible investor notices that you haven't thought about some aspects he might back out. Being able to show him your business plan can give him insights in your business and in you, answering a lot of questions. On top of that most investors won't even think about granting a loan without seeing a business plan first.

Accountability
We need to be held accountable. In the business plan you should write your goals. When you are progressing towards your goals but start to procrastinate you can look at the writings of the past you. These writing are the things that you wrote down, they don't lie. And they will help you to keep motivated to reach your goals in time! Whenever you don't do this it's easy to move on but when it's there in front of you on a paper/computer it's much harder to ignore.

Hopefully you now are convinced that a business plan is essential to growing a successful business. One last thing you should know is that a business plan is never finished. It grows together with the business. In the following posts I will continue to explain the different parts of the business plan and how I handled them. Piece by piece because trust me it's a pretty big work.