The success of your business depends largely on the decisions you make. A business plan allocates resources and measures the results of your actions, helping you set realistic goals and make logical decisions.
What's in This for Me? And What Business Am I in?
You may be thinking, Why should I spend my time drawing up a business plan? What's in it for me? If you've never worked out a plan, you are right in wanting to hear about the possible benefits before you do the work. Remember first that the lack of planning leaves you ill-prepared to anticipate future decisions and actions needed to run your business successfully.
A business plan gives you a path to follow.A plan with goals and action steps allows you to guide your business through turbulent, often unforeseen economic conditions.A plan gives your banker insight into the condition and direction of your business so your business can be more favorably considered for a loan.A plan can tell your sales personnel, suppliers and others about your operations and goals.
A plan can help you develop as a manager. It can give you practice in thinking and figuring out problems about competitive conditions, promotional opportunities and situations that are good or bad for your business. Such practice over a period of time can help increase an owner-manager's ability to make judgments.A sound plan tells you what to do and how to do it to achieve the goals you have set for your business.
In making your business plan, the first question to consider is, What business am I really in? At first reading, this question may seem silly. If there is one thing I know, you say to yourself, it is what business I'm in. Hold on and think. Some owner-managers have gone broke and others have wasted their savings because they did not define their businesses in detail. A clearly defined business will not only help your planning, it could mean greater profits.
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