Business planning

You have probably heard of the adage ‘failure to plan is planning to fail’ or the proverb of the 6 P’s Prior Proper Planning Prevents Poor Performance. The moral of both of them is that by taking the time to plan ahead of time can help with a crisis later on. A crisis may not always be averted, but having a framework in place makes it easier to manage when they do occur.  Taking the time to write a business plan is a very important step and failing to do so will lead to a crisis later on.

A business plan does not necessarily have to be a long complicated document, but it does need to put your business idea down on paper and identify the purpose of the business. It should cover the following:

• The customer
• The environment and market conditions the customers reside in
• The strategy of the business including its structure and function
• The financial feasibility of the business including all costs to build it

This document then serves as a reference for the decision making process. When deciding what avenue to grow the business or how to adequately spend your time, this plan helps to align your end goal with the steps needed to get there. If something does not fit with the strategy of the business then choose something that does.

It appears that one of the reasons businesses struggle is they either lack a coherent plan, or they veer away from that plan. There was  a reason the business was started and getting away from that vision may not prove profitable. If the proper effort is put into identifying the current and potential future market position and determining the avenues for generating revenue, and hopefully profit, then the business should be in a position to achieve its initial objective (assuming that the vision is realistic and attainable). By changing direction without a plan in place, there is less of a certainty of future success.

It is very important to take the time to really think about the business, why the business exists and who it exists for and then trying to identify the markers for future success. This process of thinking through what the business is helps to clarify the mission and objectives. Putting the time in up front will save a lot of time, and money, later.