Top 10 Reasons Businesses Fail: Number 6- A Poor or No Business Plan
A Poor or No Business Plan. A business plan for your business is like a road map. Most businesses have never done a business plan. Some did one when they started the business and have never updated it and most of these were done by the business owner, not a professional.
I stated that the B Plan is like a road map. If you are leaving Louisiana to go to Disney Land in California, and you have never made that drive before, you would get on google or yahoo maps or use a GPS unit. You would not just get in the car and drive. The interesting thing is that you would make it to your destination and I equate this to writing your own business plan. It’s better than blindly jumping in the car and driving, but did you make there in the most efficient way in the shortest amount of time? If you were to ask someone that makes that drive several times a month, they might tell you, when you get in Phoenix, get off of I-10 and take I-17 because it will save you a lot of time with construction. A professional that does this all the time can better predict what obstacles you are going to face because they have seen it so many times before.
Most owners do things through trial and error, especially when they first start the business. Trial and error costs most small businesses tens of thousands of dollars. Avoiding this starts with the B Plan. So what should you include in this plan? First, realize that there is a difference between a B Plan that is needed to obtain financing versus one that is needed to run the business properly. Particularly, there are more things that you would put in to obtain a credit line that won’t be in your “road map plan” for the operation of the business. E.g. Executive summary, Company summary, etc…These are items that can be omitted. The following are some of the things that you want to plan so your business runs well:
1. Market Analysis
2. Strategy & Implementation
3. Financial Plan (including a full budget, break even analysis and cash flow projections)
4. Sales plan (written, as mentioned in a the last post)
5. Goals timeline (sometimes called milestones)
6. SWOT analysis.
After writing today’s post, I have decided to write about the different parts of the business plan listed above in detail in my next series of posts.
Remember, a professional football team has a play book containing what plays they can make and how they will respond to the competition. Your business plan needs to do the same. It needs to be written the first time and then revised every year.
Written By Ameen Walker