The Importance of Having a Business Plan

Do You really need a Business Plan? 

There are two primary reasons why you should have a business plan. One is for you, one is for them. You need a road map, directions to get you to where it is that you’re going. Some of you are saying, “I’ve had businesses. I’ve been successful and I didn’t have a business plan.”  Unfortunately, you have no idea how much better you could have done financially or the time, money, or effort you could have saved with a business plan. It’s a map showing you how to get to where you’re going. If we have the map, you know how to get there faster, you can accomplish more and go farther in the same amount of time. 

Who is the “them” that needs your Business Plan? 

The second reason to have the business plan is for the banker, lender, investor, partner, somebody else, whether they’re lending to you or investing in you or working with you. For that other person who’s involved with what you do. They need to know what the goal is, what the vision is, where it is you’re headed so they can decide if they want to stay on your bus and come with you, get off and go on somebody else’s bus. 

What are the 8 Ps? 

Let me share 3 of the 8 “P”s that you need to create a great business plan. People. It’s all about the people that are involved in the business. What have they done that is in this industry or similar to this industry? Surround yourself with other people who have done it before, make them a part of your team. So that when somebody is looking in from the outside, they see your experience, even if it doesn’t exactly relate to assisted living, They also see the people that you’ve surrounded yourself with. Product. What the product is, the place in the market. Are you on the high end or are you at the low end? You don’t want to be down on the low end beating each other up for pennies and you don’t want to be at the very top where there are only a few customers. You want to be in what we call the “sweet spot” and having a business plan gives you the roadmap. There are eight Ps that we teach you. But the final P is: Plan for your exit. In a business investment that typically somebody is investing money in. You’re going to refinance into long-term low-interest rate loans and they get their money back. So typically in two to five years, they cash out. That exit plan is what an investor or a lender is going to want to see very clearly. They also would like to see more than one exit plan in case plan “A” doesn’t work. 

Will a business plan help you raise the capital you need? 

Raising capital for assisted living is the easiest thing I’ve ever raised capital for, but you need to have a business plan in order to do that. Don’t expect anybody to give, lend, or invest in you or be a part of what you’re doing financially unless you have a written plan, but if you do and your clear and succinct and you surround yourself with the right people, you’ve got a plan, you absolutely can get it funded and be successful. 

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