Considerations for when to engage in building a business plan.
Many business leaders go into business without having a business plan. Many successful business owners will say that simply because there are so many unknowns, a business plan isn’t a good use of time. It is suggested that a simple, one page plan should suffice to open up many types of businesses – especially service based business, and operate profitably.
Perhaps that is true. But what if we are wrong?
An article from Small Business Trends reports that businesses are twice as likely to be successful as those that don’t have a plan. GrowthThink offers another 20 Reasons why you should have a plan. The question you may have is which way is correct? Knowing that a business plan can become obsolete as soon as it is completed, given the rapidly changing marketplace, at what point does it make sense to make the investment?
There probably isn’t a simple answer for this – businesses that need funding, have complex offerings, manufacturing, employees will typically need a business plan from the beginning, versus many service businesses that may not require funding or as much funding, such as consulting, architectural, marketing, advertising may not need one right away. Across the board, where the business absolutely requires a plan – essentially a model – is when the business is preparing for growth, be it through expansion, acquisition or replication.
This is because the business is more complex and you, as a business leader, need to sit down and figure out how it all works. Consider this scenario: You invest significant funds into your advertising and marketing…and you get more business. Substantially more. How do you scale up, quickly, finding new employees, training them, and ensuring that your service level remains the same? Sure – you could get by, but is getting by the most profitable way of operating? Is it the safest?
Here’s another: how do you set milestones for your company and what to do as you approach them. For example, you probably know that adding a certain employee to your company will create an outlay of capital that may be slightly uncomfortable. While it will be uncomfortable, it will increase productivity across the business, increasing your capacity. . What if you hire too soon and the money and business aren’t there? What if you wait to long and your customers/clients aren’t willing to wait until you get it together? By having a plan in place, you will have a good idea, not only of when to make the decision, but also, what the outcomes should be.
Granted, business planning is not always fun, may require engaging someone with skills and experience beyond your own and may delay going to market, but to build an extraordinary business, your plan will be your foundation for and roadmap to growth.
Aepiphanni Business Consulting: The Business Strategy People is an Atlanta, Georgia based Operations Management and Business Strategy Consulting Firm dedicated to serving the needs of small to medium sized business leaders. We help business leaders DESIGN | CREATE | BUILD extraordinary businesses. We support our clients with financial management, product and service production and delivery, outsourced services management, sales & marketing and business growth. We provide them with a number of flexible solutions to help them reach their goals.
Join us for a Coffee & a Consult, to learn more about Aepiphanni and how we might help you move your company from existing to extraordinary.