The traditional business plan has seen its ups and downs over the years. While still recommended for start ups, especially those seeking funding, business experts and assorted talking heads waver on the role of the traditional business plan for existing firms. The necessity and value of a lengthy document stuffed with research, carefully worded text, and financial analyses is often seen as too cumbersome, time-consuming and expensive. “The business world is changing too fast! By the time the plan is done, it’s outdated!” they say. Besides, an existing business already knows what it does well, who it targets, and how to reach their goals, right?
Not so fast.
Here is the reality: businesses always need to plan effectively, regardless of how long they have been in business. The questions that effective planning seeks to answer are always relevant.
- “What are we trying to accomplish?”
- “What will be required?”
- “Who are we targeting, and how will we reach them?”
- “How much money will we need?”
- “Will we make any money?”
- “What is our competition doing?”
Here are six great reasons why your business needs a plan.
1. To define success:
The planning process helps you get very clear about what success will look like for your business. If you don’t know the target, how can you hit it?
2. To assess your market:
Proper planning helps you validate both the size and makeup of the market. Are there enough customers who want what you offer? What do they look like and where are they? What is your competition like, and can you compete effectively?
3. To discover what it will take:
A good plan helps you ‘count the cost’, so you know what you are getting into.
What will it cost, in time, effort, and resources to attract your ideal customers, to expand your reach, add staff, or build that new location? What will you need to learn? How much money will you need to invest? Can you get there from here?
4. To identify ways you will achieve:
Planning helps you uncover the strategies that will generate the results you seek. What methods will be used to get your message to the right market? What marketing tools will you use? What kind of skills do you need on your staff? What partners will you work with to increase your odds for success?
5. To avoid mistakes:
Too many businesses fail in the early years. Many mistakes are probably preventable, if you take the time to learn from those who have ‘been there, done that’ and lived to tell the tale. Mistakes will be made, no question about it, but a good plan will help minimize the most common mistakes, and potentially uncover and correct others before they happen!
6. To engage your team:
A growing business depends on a team of talented and dedicated employees. A solid business plan, effectively communicated with your employees, helps them better understand what the overall business goals are and how their efforts will contribute to hitting the target.
Writing an effective business plan has many benefits, whether your business is just starting out or in the third generation. Take advantage of what the planning process can do for the future of your business. It’s not the Plan; it’s the PLANNING that makes the difference.
Warren Williams is president and founder of TurningPoint Business Coaching. He provides coaching to growing businesses in Concord and the Greater Charlotte area. Have a question about this article, or a topic you’d like to see covered here? Contact Warren at firstname.lastname@example.org or visit www.TurningPointBizCoach.com.