Do I need a business plan for my one-man business?
Published by www.entrepreneurmag.co.za on January 28, 2014
I have a small business in which I am the only employee. Do I still need to write a business plan?
In my experience (as a business mentor) my answer to this question is a resounding “Yes!”
Here's why:
- One Person Business: As a one-person business, you might feel that you have all the knowledge and information needed to run the business and to steer it in the right direction in your mind. However, a business plan can be used as a working document that can be moulded and adjusted over time as things progress. Michael Gerber in the E-Myth book points out that as an entrepreneur you need to know your primary aim because it provides you with purpose and energy for your daily activities. You should consider asking yourself questions that will help you to understand your primary aim.
By having an official business plan that has been designed by you to steer your course, you can assess any potential opportunities as they arise and make a decision about whether or not they stray from or affect the original vision of your business.
If so, how far does it stray? And if it strays from it too much, will you be able to get back on course after the detour by making a lateral move? Or will it mean that you would have to backtrack after the detour to get back on to the original road.
It's very important that your business plan is aligned to your life vision because it becomes product of your life.
- Future Growth: You should also look at future growth in the business and the possibility of needing investment such as financial investment at a later stage. Without a decent business plan it will be extremely difficult (if not impossible) to attract any assistance. Ask yourself, “Would you get on board a ship which has no compass and simply trust the captain who says he knows where he is going?” I don't believe you would. A solid business plan will provide some assurance to potential investors that you do have a plan and know where you're headed!
- Review: As previously mentioned, your business plan is a working document that should be reviewed every year. Add information where necessary and take out information which has become obsolete or irrelevant. This will allow you to look at opportunities which were perhaps not capitalised on during the year and others that could be put in to the plan for the upcoming year – all the while keeping the vision of the business in mind when making any decisions.
Every business, including the ‘one-person-owned business', should view a current, relevant and company specific business plan as a powerful tool to assist them in ensuring that the business stays on course and ultimately reaches its full potential.
About Guy Cloete
Guy Cloete joined The Hope Factory in 2012 as a business mentor after having worked in his family's business for several years. Cloete has much experience in small business development, and is passionate about The Hope Factory's vision of empowering South Africans to become financially sustainable.
