Why Good Business Planning is Essential
Business Planning for Success
The Essentials of Good Business Planning
Good business planning strategies involve more than simply writing up a business plan, although that is a key part of planning. Many of the essentials are found when you begin to research your information for your business plan and for your marketing plan. To write an effective business plan you need to study your market, know your customers, know your method of product delivery (via retail, service or manufacture) and understand how you will pay for it all. Business planning also takes into account the time frame which it will take for your business to turn a profit and what the pace of increase will be.
The Reasons Why Good Business Planning is Essential
Good business planning strategies are essential for a number of reasons. First it helps you understand and acknowledge any possible concerns or problems which may arise from the method of operation you have chosen. Planing also gives you the option to write different scenarios on how your business operates. You may need a broader coverage area or a smaller building to start. This will be shown when you have a good working business plan in place. If you have a good plan you will also have a built in way to alter or change parts of the plan to adapt to changing situations. Good business planning is when you see problems up ahead and have the ability to alter a planned course because you have provided options for yourself.
The Outcome of Poor Business Planning
Poor business planning is found in many situations. If you have come to a problem and cannot alter your methods or actions, this is poor planning. If you have failed to ensure continued support for your operations, either by financial readiness or contingency plans should the business face physical disruption, this is also poor planning. While not every possible outcome can be planned for, such as sudden downturns in the economy, many other sudden problems can be avoided. The death of the owner causing the questionable future of the business can be planned for. Continuing along a course you have held for over five decades, such as what the American auto industry did, is a result of poor business planning. They made no plans to reconsider options or alternatives when signs of serious problems showed.
What Happens Without Any Planning
Implementing no business planning strategies are even worse than poor planning. The reason? Even poor planning is at least some type of planning. If you go into a business without knowing your market share, your cost of operations, who your customers are, and why they want to be your customers, or how you will even show the value of your business to customers, then you have no business planning. An example would be someone who quits their job to be a handyman. They have the knowledge, and the van, and a few tools. They have no idea how much advertising it will take to bring in the first customer, or what the cost of that customer will be. They simply think that when the first one shows up the handyman will make some money and go on. This is complete failure waiting to happen because of no planning.
Good business planning strategies are essential because of one main fact. You may be good at what you do, or have the knowledge to carry out daily operations; but if you have no plan in place to show how and how long you will need to generate income, even in bad situations, then your knowledge and experience will prove worthless over time.
Image Credit: Dollar Symbol Gold / Wikimedia Commons
