Planning…no wait…thorough planning is the key to success. Opening a business without a business plan is like setting out into the middle of nowhere with no map or supplies and trying to find a specific location you’ve never been to. You have an idea where you want to go but you have no idea of which direction to take or what supplies you will need. It is impossible to get there, right? The fact of the matter is that most entrepreneurs do exactly that. They have a brilliant idea and the courage to go after it. But that’s not enough. There are thousands upon thousands of small businesses that failed, despite that initial great idea and their owner’s courage to go after it.
Read More: The Misconceptions of Starting and Running your Own Business
Why do they fail? Lack of funding, ignoring the competition, ineffective marketing, poor location, not understanding customer needs, cash flow problems…there are a multitude of reasons why businesses fail. However, all these reasons have one crucial factor in common – they could have been avoided if the business owners had compiled a comprehensive business plan before they opened their doors for business. The primary purpose of the business plan is to guide you in successfully setting up and operating your business. Preparing the plan forces you to consider all aspects of your business and to confront any problems the plan highlights…while your business is still on paper.
The fact is: Your business plan is literally your road map to your success. Any road will take your business somewhere, but only a well-executed business plan will help you take your business where you want it to go.
Effective time management is one of the most over-looked – yet essential – tools when it comes to planning a new business venture. It is all too easy to underestimate the amount of time it takes to plan a sustainable business.
Most people plan their new venture while still maintaining their original full time employment. So time management is even more critical. Just as a well-run business follows a budget in spending money – so an effective entrepreneur needs to follow a budget (or schedule) in spending time. This means being systematic and rigorous in managing your time. Set your time frames. Then schedule “blocks of time” that you set aside specifically for working on your business plan. Free up extra time by establishing where all your spare time goes – and then using it for working on your business plan
Your business must be sustainable.
Planning a sustainable business means that it must:
- Be easy to run and fund
- Be able to endure for a long time
- Be able to stand up to problems.
Here are some general guidelines on making your project sustainable as you start out:
- Start small, which means: You can make mistakes without risking everything; It’ll be easier to manage until you get into the swing of things; It will be easier to fund the start-up costs; It’ll be fun and fulfilling.
- Uncomplicated: Keep your business and your strategy simple at first. Nothing causes more problems faster than trying to do too many complicated and difficult things in the beginning.
- Specific: It is only by concentrating on specific needs (be it a product or a service) that a business venture can succeed – and grow and achieve its potential. You must be absolutely clear on what you want your business to achieve. If you are vague about what you want to achieve, you’ll never achieve it.
- Total commitment: You need complete faith in your business. You also need committed energy, hard work and single-mindedness to get it going and keep it going.
- Competently managed: Many, if not most, small businesses start from the heart but need to be run from the head. They need to be managed just as effectively as any large business.
- Income-based: A sound financing plan spells the difference between success and failure. Your service or product may be urgently needed but if your income doesn’t exceed your “outgo” you’re going to end up in dire financial straits. A business that needs constant financing to keep it going won’t last. It has to be relatively easy to fund every month.
- Needed: Be sure that there is a real need for your business and your products or services. Fad, fashion, and luxury products or services frequently run into financial difficulties. You’ll have a bigger market if you have products or services that are viewed as essential.
