Every Business Needs A Business Plan

A lot of small businesses start without a business plan. As a result, there’s no vision (where do they want to be?); or a mission (how will they get there?). Nor  goals (what do they want to achieve) or strategies (how will they achieve their goals?)

It makes one wonder? Maybe the business owner or manager is waiting for customers to stream into the store – and then blaming them for ignorance when they don’t. Predictably, the retailers will have lots of merchandise, but no cash after a while.  That’s a very bad situation, because at the end of the month, the bills and salaries need to be paid. Even more, there won’t be enough money to try other types and styles of merchandise see if what will sell… Eventually the retailer’s cash runs out, and (sadly) he is forced to close his store.

Failing to plan is planning to fail. That’s why every business needs a business plan.

Strangely, some commentators suggests that a business plan is not needed. Indeed, Randy Duermyer writing in ‘The Balance’ suggests that a business plan is not always needed.  However, he somewhat backtracks by concluding: “I’m not saying that it’s not important to plan before you start a business- it is critical.”

In fact, if you have a well researched and written business plan, you’ll have a plan in place to start your business on the right track. After a while you should enjoy a competitive advantage over those not having 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.

Business plans have 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 plan must indicate the following:

• What activities the enterprise will be engaged in?
• What the mission, objectives and goals of the enterprise are?
• The strategy must be followed to attain these goals? And
• What control measures will be used if goals are not attained?

Concluding

There are many templates available for small business owners to write their own 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 planning is a productive investment.

Remember, you need a well researched and written Business Plan to get your business off to a good start!

Read also: What Traits do a Business Owner Need to be Successful?

Note

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.

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