The main answer is probably obvious – but what may not be so obvious is all the other reasons to have a plan.
1. To make sure your idea is a good one
...and one that will have decent prospects of transforming into a business with a product/service that will sell (the obvious one).
2. To help you keep evaluating your plan, and to keep you on track as you start building the business and managing all the moving parts
...it’s all too easy at times to spend so much time in the everyday activities of building the business that you forget to sit back and take the time to evaluate how well that build is doing and whether it’s keeping to plan.
If you’re ‘off piste’, it doesn’t necessarily mean that you’re headed in the wrong direction. Plenty of businesses realise that their original assumptions or ideas need refining as they start testing their ideas and converting them into real activities/products/services that can be tested with real customers.
Ending up in this position is not a sign of weakness or lack of ingenuity or competence. Some of the best business creators had to go back to drawing board many times before they hit on that magic proposition.
3. To excite those people your ambitions depend on
...like collaborators, suppliers, workers/employees, customers, investors, journalists, etc. You need to be able to talk to others about what you’re doing, why you're doing it, what it means and what you may want them to do with what you tell them, e.g. join you, help you, invest in you, spread the good word about you.
The classic pitch deck formula comes from this early plan:
- who are you?
- what’s the problem you’re solving?
- how are you the solution, and how many people will benefit from it (size of market and opportunity)?
People will want to ask you questions and for you to give them confidence and feel excited about what you’re doing – and so you’ll need to be able to answer these questions concisely and with ease.
4. To convince others to assist you
...for example: grant you a loan (e.g. a bank), a licence (e.g. a local authority), and/or tax relief eligibility (that’s HMRC – see our guide on the best incentives you can ever offer an investor: SEIS and EIS relief.