Planning For Business - Risk and Success

Many people start small businesses and often seem to fail. Risks always exist in business.

You can reduce those risks if you make time to plan in advance. This means defining your business offerings, doing specific market research, recognizing the essential management skills you need, and projecting realistic financial expectations. In short, you can reduce risks when you write and use a plan. Small business owners often say they don’t have time to write one. There is too much to do and they want to just run the business. (Or, they may be intimidated by the planning process or simply procrastinating.)

It’s true that some small businesses start without planning and do very well. However, once a business is launched and things get complicated, it can be confusing to figure out next steps. A good plan can help you focus. Business experts disagree about the importance of writing a business plan. Some research has found that writing a plan greatly increases the chances that a person actually goes into business. There are others,, like Steve Blank, who say that real entrepreneurs don’t write business plans.

I actually agree with Blank’s approach. In his classes, he’s pushing students to constantly talk to people and test their theories as they plan. A hands-on, real-world approach is central to how I teach entrepreneurship, too. You cannot write a plan in a vacuum and expect it to serve you well. You must connect with people and constantly test your assumptions.

Writing, implementing, and maintaining a plan is hard work. Planning means learning to take the pulse of your business — over and over again. You have to be open to new ideas and be willing to learn from your mistakes. There is a reward. You will have an operational management tool, a marketing plan, financial projections, and a means of communicating your business to others.

The primary purpose for writing a plan, though, is for the process itself. It forces you to be objective and critical, identifying weaknesses, challenges and opportunities and setting benchmarks to track progress. Doing research, talking to people, and analyzing your operation will give you confidence to continue with the business. It’s really important that the plan reflects your unique owner perspective.

The plan is a foundation from which each owner’s business judgment, personal feelings and intuition are measured. You write it in a format that is easy to update. To be truly useful, a plan should be a dynamic document — current, accessible, and appropriate for the business. Don’t waste time making a pretty document unless required. It doesn’t have to be perfect. The is that it is useful for you and your business.

A plan doesn’t guarantee success but it can help prevent serious mistakes. It helps you stay attentive to the important details, industry trends, new directions, and business growth. A good plan will help you maintain profitability, acknowledge and minimize potential risks, and develop confidence for future opportunities.

So how do you find the time to write a business plan? You don’t. You are always planning. Your plan is never done but your planning process is your key to good management.” So, write that plan (or revisit your old one). It could be well worth your effort!

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