Many small businesses start without a business plan. There is no vision (where do they want to be?); or mission (how will they get there?). Nor do they have any goals or strategies.
Maybe the owner or manager is waiting for customers to stream into the store – and then blaming them for ignorance when they don’t. Soon the retailers will have lots of merchandise, but no cash. However, at the end of the month, the rent and salaries needed to be paid, and – maybe other types and styles of merchandise must be purchased to see if that will sell… And then cash runs out, and the store closes its doors. Every business needs a business plan.
Some suggests that a business plan is not needed. Randy Duermyer writing in ‘the balance’ that a business plan is not always needed qualifies his statement by commenting: “I’m not saying that it’s not important to plan before you start a business- it is critical.”
You might as well do a business plan.
What is a Business Plan?
‘A business plan is a workable written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture’. It organizes all the information gathered by the entrepreneur and is therefore the first formal planning instrument.
A business plan has two basic objectives:
- It identifies the nature and context of the business opportunity. (Why does the opportunity exist?); and
- It explains how the entrepreneur will develop this opportunity.
The business plan is a detailed action plan or road map outlining every conceivable aspect of the proposed venture. The plan describes what, how, when, where and why with regard to the new venture. It is thus a structured guideline for achieving your business goals. The business plan must indicate the following:
- What activities the enterprise will be engaged in?
- What the mission, objectives and goals of the enterprise are?
- What strategy must be followed to attain these goals? And
- What control measures will be used if goals are not attained?
There are many templates available for small business owners to write their own business plans. That is a great start and maybe by doing it, you’ll recognize where the gaps are that needed to be filled before opening your business. Making use of a management consultant to help you with your business plan is a productive investment. Failing to plan is planning to fail…
Remember, you need a well researched and written Business Plan to get your business off to a good start!
Cronje de J, G.J., Breebaart, H., De Klerk, A., Old, S., Swanepoel, E. and Van der Merwe, M.A. 2001. Introduction to Entrepreneurship and Small Business Management, Only study guide for MNE202-V, Department of Business Management, UNIVERSITY OF SOUTH AFRICA, PRETORIA.