Although there are countless articles and courses that promote the drafting of business plans. However, there is still a debate on their usefulness. On the one hand, some consider the business plan a waste of time and resources, so they prefer to take action immediately. On the other hand, some argue that writing a business plan helps to start and organize the work activity so that it is possible to achieve one’s goals. The results of the studies conducted in this area are also divergent. And it does not allow us to understand whether drawing up a business plan is actually advantageous.
Research on the usefulness of writing business plans
Greene, a professor at the University of Edinburgh Business School, and Hopp, of RWTH Aachen University, carried out a study to resolve this controversy. They examined the reasons that push entrepreneurs to create a business plan and the contextual factors that favor starting a business. In fact, the context greatly impacts the possibility of starting a business. Researchers used data from the Panel Study of Entrepreneurial Dynamics (PSED II. After that, they analyzed a sample of more than 1000 entrepreneurs, divided into two groups based on who wrote the business plan and who did not. The study found that entrepreneurs who draw up a business plan are 16% more likely to be able to start their own company than those who do not write it.
Planning is more useful when the challenges are greater. Therefore for companies that intend to grow quickly or for those that propose innovative and disruptive ideas. Furthermore, it was found that, for many entrepreneurs, the illustration of the project has the primary purpose of obtaining external financing and facilities.
Business plan: the first step in starting a business
Writing a business plan can make all the difference when it comes to building successful startups. Certainly, most entrepreneurs do not immediately ask themselves whether or not to implement a business plan; at the beginning, you have a rather nuanced view of your project. However, when the business idea begins to take shape and growth and innovation become necessary, then the business plan plays a fundamental role in the success of the new business.
In general, business plans allow you to transform ideas into tangible actions. It is necessary for starting a business and improving entrepreneurs’ decision-making process. This study demonstrates the importance of drafting business plans.
Business Plan: What it is and why not start here
The Business Plan is a crucial document. It describes your business project with a view to obtaining strategic guidance for the business. It also makes you able to present your business idea to investors and banks when looking for a loan.
The Business Plan is mainly composed of two parts:
Descriptive section (qualitative):
Here you have to describe an in-depth analysis of the entrepreneurial project and reference markets, resources, and tools necessary for its realization. This section of the Business Plan also contains a feasibility study of the idea. It demonstrates how the company can grow and relate to the external market and the internal environment.
Numeric (quantitative) section: numbers come into play here.
This section consists of the set of economic-financial performance forecasts of the business idea.
Rationalizing your idea with the drafting of a Business Plan is necessary. But before doing that fully understand who you want to be. And how you want to present yourself to the market.
This is why, before delving into costs, revenues and projections, it is good to dwell on what makes your company solid, unique, and special.
The first step I recommend you take to start your business on the right foot is to leave your Business Plan for a moment. And focus on your Business Model carefully.
Define the value of your company and find out what makes it unique
Every day we are surrounded by messages of all kinds, a sort of background noise that advises us to buy this or that product. Some messages suggest choosing this or that company.
What really guides the customer’s purchasing choice? I don’t have a single answer to this question. And I’m sure it doesn’t exist. But every company needs to define its own unique value proposition.
It is defined as UVP (Unique Value Proposition). It is a clear and persuasive message that presents the company and its values in a few words and captures the customer’s attention. Hence, it makes the company stand out from the background noise.
The Business Model is essential to be able to understand exactly what the pillars of your business are. And what are the distinctive factors, values, vision, and unique and inimitable approach that only your company can offer?
Discovering your company’s identity is what will give you the freedom to bring to the market a new awareness. Strengthened it by the elements that characterize with the certainty of always being able to express, on every occasion and by any means, the company’s identity. Thanks to your unique value proposition, only in this way will you know what to communicate, how to do it, and who to contact.
Seeing the Business Model take shape and receive the first requests. The first purchase from the customers you have always dreamed of is immense satisfaction. That will repay you for every effort made to fill in those fateful nine building blocks.
Final Thought
Whatever your business: start with the Business Model, identify your unique value proposition, and stand out from the competition. And then conquer the world. If you can’t write it yourself and seek Business Plan Writing Services, count on us. Our experienced business plan consultant will create a roadmap that will help you become a rising star in your industry.