Why write a Business Plan? Much to my amazement I have found that Business Planning is still quite distasteful to the majority of small business owners and perhaps that’s why they will continue to always be small Business Owners.
Even more surprising is the fact that many small businesses owners either 'have not' or 'have not for many years' written a business plan.
When questioned as to the reason for this, the standard answers are as follows:
1. I don't have the time
2. I never needed one
3. They are a waste of time
4. They are out dated before they are finished
5. My accountant did one
I am certain you will be able to find many more reasons that have not been listed here. Believe me I have heard them all.
I know, there are many small business owners out there who have gone through life in their own business without a plan. However, if they are doing alright now, then how much better could they have done with a business plan?
There is obviously a real reason for banks and investors to want to see a business plan before considering parting with any money and despite what you may think it is not to make the business owners uncomfortable.
If you were lending your money to someone would you not ask some questions like?
1. How soon will the money be needed?
2. What is the money going to be used for?
3. How long will the money be needed for?
4. How much interest is to be paid on the loan?
5. Can the repayments be met?
These questions are the start of every business plan and if you haven’t asked the same questions of yourself then you are playing at being in business.
Harsh words you may say, however, the fact that less than 30 percent of new small businesses worldwide survive their first 2 years in business makes it painfully clear that something somewhere is missing. Having looked at everything around new business start ups over many years, the one glaring difference between those who do survive in business and those who don’t....is a working, living business plan.
I won’t beat around the bush as my business relies upon looking at reality and I am here to ask the hard questions, 'do you really know if you are heading in the right direction for lifetime success without a business plan?'
Your accountant might know because he wrote it, but where does that leave you? At the end of the day, your business is your responsibility, you call the shots, and your accountant is only doing a job.
Often business planning is seen as a waste of time because things are always changing and a lot of it is guess work and this is valid comment. Many see a business plan as outdated before it is actually finished. Fair comment too! However, a business plan is never finished; it is a living document that needs constant changing and updating. All business survives on change and this involves a lot of research, some guess work and a plan.
If business planning could be seen as a game of football or a 1000 meter freestyle swimming race, it would not be finished when the game or race is over. The athletes involved wouldn’t just sit and wait until next match or swimming meet and hope they have another victory, they would be setting goals to be a little faster or stronger or more organized the next time. They would be developing a plan with goals, objectives and strategies to meet those goals and then having done that and succeeded, they would start planning all over again.
However, for those of you who don’t have a business plan, this is exactly what you are doing, sitting and waiting for things to happen. You won’t know where to start, where you are headed or even if you have won….. So how do you know your business is as successful as it could be. It’s a sad day when you hear what appears to be a successful business owner say he can’t afford to pay himself or he has to work 18 hours a day simply to keep his head above water.
A Business Plan is based on assumptions, but the assumptions are made by you. The more accurately you can estimate what you want to take home as payment for your work, how much you have to pay for staff and materials, how many customers you will have to find, how much you can produce in any given time and what your taxation commitments will be is a good beginning, this is what will give you a good basic idea of what is required to make your business a success. And, if your plan shows you that your business cannot work, wouldn’t you rather know before you invest your life savings, or put your family at risk of losing everything including the family home?
Business Planning like any other chore, pleasant or unpleasant, if approached with a positive attitude is a tool to help your business grow and prosper. The task will always be simpler if taken in small steps, it will be much easier to digest, giving you a map, a plan to show you where you should or could be going, when you are going to get there and how you are going to do it.
Building a successful business isn’t easy. The tools are all out there, how you use those tools will determine the quality of your success. Don’t fall of your bike and jeopardize your chance at success because you didn’t want the training wheels on at the start, practice with the wheels on until YOU are ready for the ride of your life..
|
Contributor's Note
With a background in business planning, management training and mentoring, I have assessed over 2000 business ideas in the past 10 years with many succeeding beyond what was expected, however, I have seen even more failing miserably because they didn't take that extra step into business planning. Don't become just another statistic, plan today for success tomorrow.
|
