By JJ Richa
J.J. Richa is a successful entrepreneur and technologist giving back to the entrepreneurial community in many ways, including his weekly Internet TV program on entrepreneurism, and participation in several mentoring programs.
Business planning is a crucial part of a successful business. Business plans are dynamic instruments used on a regular basis to help owners and executives to plan for future growth, and
From Basic Berkonomics: Available Amazon, B&N, berkus.com and booksellers everywhere.
assess past performances. Included in a business plan are financials, competitive landscape, marketing plans, and projected sales to name a few. Without a business plan, you probably are not sure where you are going, or how you are going to get there, or how you are going to know where you’ve been. If you don’t know these things, how are you going to course-correct if things go differently than forecast?
A business plan:
- Organizes your thoughts to better run your business
- Depicts your roadmap/blueprint, and must be revisited often
- Defines your business vision, objectives and goals
- Determines financial requirements
- Keeps you on track to achieve your goals
- Helps you to be more focused
- Forces you to be more objective
- Determines feasibility
- Serves as management tool
- Assists you in raising capital
I’m not seeking a bank loan or investment. So why make a plan?
[Email readers, continue here…] A business plan is yours alone. Bankers, financial institutions, and investors hardly look at business plans. But it’s a valuable document for you. By creating a plan you are forced to think about your business and how it is structured, the objectives and other critical matters. The plan helps an owner realize how interrelated all aspects of the business are. In addition, it helps you focus your ideas and determine how to best manage your available resources including capital, cash, and people.
After completing your plan, you should be able to answer questions:
- Is there really an opportunity here?
- Can we pull it off?
- Can we make money? Is there potential for profits?
- Where are we?
- How did we get here?
- Where are we going and how will we get there?
Forecasting your finances as part of the plan will help you understand if, and how, you can improve revenue. It’s hard to make changes if you don’t know where you are, and where you’ve been.
It helps other answer the following question:
- Will they have a chance to succeed?
- Can they pull it off?
- Will the cash flow?
- Did they make any headway?
- What have they done so far?
- Will they be able to execute and reach their objectives?
As your business grows, a business plan serves as a guide to help you track, monitor and evaluate your progress. Having your short-term and long-term goals written down and in front of you can help keep you on track to reach them. Business plans provide you with the ability to identify risks to your business and what alternatives exist to minimize them. By analyzing your business objectively in the plan, you can address problems before they escalate. Studies found that people who write plans are more likely to put their goals in action and increases your likelihood of success.
Business Plans are not static. As your business changes, your original plan may no longer be as relevant. Review your plan periodically – as often as once per month, but no less than once per quarter – and make updates as needed.
