When people ask “What’s the return on investment for writing a business plan?” they are actually asking two questions:
- “WHY should I write a business plan?
- What’s it going to cost me?”
Others ask for “numbers from other companies that show what kind of return they made on their business plan”. As if they could then extrapolate those same returns to their own business. That’s like comparing mutual funds – they are all mutual funds, but they are all managed differently with differing clientele, investment strategies, management philosophies, fee structures and holdings. Try and compare apples and apples with them! There are just too many variables between companies to compare plan writing results. Whenever I ask clients, consultants, or others that have written and followed a business plan, they do tell me that their numbers have gotten better often beyond their expectations.
That said, there is a way to determine an ROI on your business plan.
For those that truly do seek the magic formula, we can help you with that as well, BUT, in order to do that you still need to understand:
- WHAT a business plan is
- HOW it affects your organization
- resulting in WHY you need one
Only then will you really understand their effect, and how they help you actually save money as well as make money.
Ultimately the purpose of a business plan is to focus the decision-making process.