What is Business Planning?
Business planning can be a highly beneficial exercise for the entrepreneur. In order to derive the desired benefits from business planning it is important to take full ownership of the process, and make it your own from beginning to end. While this does not mean that you should not seek professional advice when needed, you should be careful, not to commit the common mistake of asking others to write the plan for you or being influenced by unqualified opinions even if well intentioned.
Why do I need a business plan?
Every start-up enterprise needs to go through a thorough thinking process in order to come up with viable options and strategies that will strengthen its present position and facilitate its future development. Finally, the thinking process should culminate in a set of measures for the implementation of these strategies. This implementation plan is generally referred to as the milestone schedule.
How to go about it?
All entrepreneurs think about their business. In fact, most businessmen do nothing else but worry about problems and challenges that are the daily companions of every entrepreneur. To think about your business is not enough. It is important to think in a logical and structured manner, looking at every aspect of your business (both internal and external) in a SYSTEMATIC, OBJECTIVE and ANALYTICAL way. A good thinking process should lead to good Business Planning where sensible decisions are based on reliable information and not on gut feeling.
The milestone schedule should form both the starting and concluding point of your planning process. In the first instance, well before you start writing the plan, you should make a list of all the things that you could possibly need in order to make your business a success.
Once you have gone through the business planning process you will be in a much better position to identify and prioritize your needs in line with the realities of your business venture.
What leads to success or failure?
Often, the cause of failure is that entrepreneurs do not anticipate simple factors that could easily have been foreseen had they taken the time and trouble to go through a logical thinking process. The process of formulating a business plan helps scrutinize, in a formal way, basic matters that need clarification, such as:
- Gut feelings and ideas
- Assumptions that have not been verified
- Calculations made without full knowledge of underlying principles e.g. tax rates and bank interest charges
- Regulations and legislation that could affect you
- External dynamics such as political changes and new technology that could have implications for your business
Scrutiny within a broader plan can help identify weak points early enough to make positive changes and/or adapt plans accordingly.