When taking a business management course, you'll typically find the concept of business planning within the first few modules. That's because it's so important. 20% of all new Australian businesses fail within the first year, so you need all the help you can get if you have serious ambitions of long-term success.
Should I Write A Business Plan Or Start A Business First?
That's an easy one. Your business plan should always come first, as otherwise, you're putting the cart before the horse, so to speak. You might need funding before setting up your new business, which you won't get without a business plan, which is another of many reasons why creating one should be among the first things you do.
Why Is A Business Plan Essential For A Business To Grow?
This is the crux of the matter and something you'll learn more about by reading. So, ensure you've got your notepad ready as we look through some pretty compelling reasons why every business needs a business plan.
Reason #1 - To Demonstrate Your Business Revenue Model
You can't just start a business on a whim because if you do, it's doomed to fail before it starts. The process needs to be well thought-out, and your business plan creates a structure to demonstrate how you will make money.
It needs to be highly detailed, covering elements from accounts payable to profit margins to your target market. As mentioned earlier, this kind of information is key when looking for financing.
Reason #2 - To Document Staged Business Milestones
When taking OCA's How to Write a business plan course, you'll learn that yours typically needs to cover the first 5 years of your operation. That means it will contain a series of milestones that, when met, demonstrate the feasibility of your business idea.
Hitting a milestone (like $1m in revenue) is not simply something to celebrate (although you will) but also an endorsement that your whole business concept is a sound one. Without one, you'll lack direction and purpose.
Reason #3 - To Know Your Business Competition
Before preparing your business plan, you'll need to thoroughly research your market to know if there's demand for what you offer and a niche for you to occupy. This means conducting an exhaustive analysis of your competition, so you know what you're up against.
This is an essential element of your business plan, as it will highlight your competitive advantages and unique selling points (a.k.a. USPs) and let you know if you have none to speak of.
Reason #4 - To Know Your Customers
Further to Reason #3, your business plan is also crucial in that creating it teaches you what your ideal customer looks like. You'll learn the answers to essential questions like "Why will customers buy from us?" and "What motivates customers to buy from anyone?"
This kind of insight is not what a business administration course will give you, as it's specific to you, but writing your business plan will. It's also very useful information for business owners, as it will help you hone your products and services in line with demand.
Reason #5 - To Determine The Required Capital
Feasibility is a massive part of business planning, and every business will need some kind of capital to get it started, be it money you already have or funds you'll borrow from a bank. Writing a business plan will help you to create your magic figure, i.e. the capital required to get your venture off the ground.
Before starting any business, you need to know your capital needs, and you can't leave these things to chance. You'll also cover future capital needs as part of your ongoing growth.
The Easy Way to Develop Your Business Skills- Study With Online Courses Australia
So, as we can see, business plans are crucial for any business but don't worry if you feel you need to develop your knowledge in this area; OCA is here to help. Our online training is CPD Endorsed and video-based for easy digestion, allowing you to develop your skills and know-how at your own pace and whenever or wherever you want to learn.
Our student study demo shows you everything you need to know about the immersive training we offer. If you'd like to know more about us and the full range of courses we offer, covering over 20 different sectors, visit us today at www.onlinecoursesaustralia.edu.au. There you'll see that every one of our courses comes with 1 to 1 mentoring and can be paid for in manageable instalments.
Alternatively, if you have any questions for us, just call us on 1300 611 404, where your friendly advisors are waiting to give you the answers you need. Failing that, you can always drop us an email at [email protected], and as soon as we hear from you, we'll reply without delay.