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5 Good Reasons to Develop a Business Plan

By: Greg Owens

If practice ownership is your objective, consider developing a well-thought-out business plan that establishes the viability of your proposed venture. A business plan details the financial structure and day-to-day operations of your practice. It may help demonstrate that you have a realistic roadmap for success based on carefully considered ideas about how to develop and manage your business.

Here are five reasons why developing a business plan can be important:

1) Helps you achieve your goals

Actually taking the timeto create a written plan -- to think, dream, research and document your objectives -- may increase the likelihood of ultimately reaching your destination and help you manage your business career. In addition, developing a business plan may help you understand your practice's place in the market, so you know the actions that need to be taken to improve and grow your business.

2) Helps you to be proactive

A business plan may help you see potential risks in the market so you can develop strategies for responding to them. Rather than simply reacting to whatever changes that may come your way -- whether they emanate internally or from outside influences -- you have a roadmap that defines precisely where you want to go. A good business plan may help you respond to fluctuations in the business environment. Without a documented plan, you may feel rudderless, with no destination in sight and no guideline for responding to unforeseen circumstances, such as a significant drop in the market, or new technology opportunities.

3) Functions as a communications tool

As a business owner, you may need to borrow funds or hire service providers at some point in your career. Your business plan can be an indispensable tool for communicating your business objectives to lenders, contractors, equipment vendors, and others who may need to understand your practice vision. The business plan serves as an introduction to you and your practice. It may tell your lender that you have the personal know-how and professional means to help ensure practice success. It can demonstrate that your future practice is based on a solid grasp of both the local market and outside influences. And it may provide the financial rationale a lender may need for lending funds for your practice purchase or start-up based on historical or projected performance.

4) Provides a competitive edge

With a documented vision of your future in hand, you may be better prepared to take on existing competition as your business plan can describe the marketing activities you want to use to announce your opening, attract patients, and grow your practice. It may also give you a jump-start on potential new competition - namely, all those graduates who have not yet formulated their career plans.

5) Forms the basis for an exit strategy

A business plan is not only a roadmap for you, but also for your potential buyers. It may help them understand how your practice evolved, whether it met or perhaps exceeded expectations, and whether your vision for future growth was realized. If you sell your practice before your business plan is fully implemented, it might serve as a useful guideline for future owners to further develop the practice.

There are many more excellent reasons for creating a business plan - for example, to share your vision with family members and employees, build a framework to help attract new associates or investors, and provide a foundation for practice valuation. In summary, careful formulation of a business plan helps you focus your vision for the future and may ultimately enhance your success. If you don't already have one, consider getting started working on your business plan today.

Visit the Wells Fargo Works for Small Business® and the Business Plan Center page for more information: https://wellsfargoworks.com/plan

About the Author

Greg Owens is the Regional Director East for Wells Fargo Practice Finance. As an experienced consultant and finance professional, he speaks nationally to healthcare professionals advising in practice planning strategies for emerging and established practitioners. His industry background offers practitioners a unique perspective as they approach some of the most important decisions in their professional lives. With more than 30 years of healthcare financing experience, Wells Fargo Practice Finance specializes in helping healthcare professionals acquire, start and expand their practices with various financing options and a signature Practice Success Program. He can be reached at 1-800-407-4737 or greg.owens@wellsfargo.com

View all articles by Greg Owens

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All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.

All financing is subject to credit approval.