Then, why bother write one? You ask.
Business plans are an essential part of corporate management. Not for the ending product, which many times ends up on a shelf collecting dust, but for the process that its writing generates. If you are a sole proprietor, this process is a true business oriented “soul searching”. If you work for a bigger organization with managers and managerial levels, it is even more important to do it.
For Small Business Owners
Let me start with the small business owner. The planning process forces you to ask very important questions about what you want to accomplish with your business and how you want to accomplish them. If you hang your shingles and put a sign “Open” in the door, chances are you are going to wait a long time before someone knocks on it and asks what you sell. This is a very competitive world, the business environment is full of similar businesses with varying degrees of success. If you are entering this difficult environment, you have to be prepared and have a plan to approach your launching activities and your growth initiatives a little later down the road.
The fact that you can sell your widgets at $X and make them for $Y does not mean it may end up being a good business proposition. You have to create a business model and run the numbers to figure out if there is enough money at the end of the day. In addition, you have to figure out how you are going to promote your business, how you are going to distribute your products, and many other aspects that will trigger your mind to formulate an acceptable answer to resolve them. Finally, a proper business plan will make you look at your competition with an analytical eye and truly assess their capabilities and the odds you have to bring additional value to the market.
For the larger organizations, planning is the only vehicle that can align the company’s goals throughout the organization. There is a forced dialog among the managers that will bring them together to create a strategy that will use all available resources to accomplish the desired results. Since there are more heads working together, some additional components can be brought to the discussion, such as scenario planning, where more than one possible action, or initiative is modeled and analyzed. This is where managers must consider the market’s underlying trends and consider all possible scenarios to compensate, take opportunities, evolve or possibly retreat. The only sure thing in business is that it will forever change and evolve. What makes planning indispensable is the need for managers to be on their toes and not wait for things to repeat themselves.
The Main Benefit
For every business person involved in planning, the idea is not to end up with an iron-clad document that will be followed to the letter, because it will not happen. The main benefit is to train the company leaders to think, analyze, adapt and transform the company from concept to reality in a successful execution path.
Managers have to perform a thorough SWOT analysis, and create strategies that help the organization position itself to maximize their competitive advantages. From there, they have to devise ways to take the plan to reality. Execution is Key! Otherwise it’s only an exercise. The financial costs and profitability of each initiative have to be considered in all the different alternatives proposed, so that there is a good understanding of the potential gains/losses involved.
In summary, in the words of Winston Churchill “He who fails to plan is planning to fail” Once you think about the issues, it is a lot more likely that you will devise ways to deal with them in a constructive and profitable way. Be sure though that the theory is never equal to the reality, it’s only an approximation.
If you are interested in creating a successful business plan, be sure to register to one of our seminars where we will explain in detail how to create this important document. If you need help now, give us a call at 832-594-8161 or drop us a line on the Contact Us section of our website at www.lasobcs.com