In the words of Alan Lakein, a popular author on personal time management, “Failing to plan is planning to fail.” Business owners may neglect planning for a variety of reasons. They may dislike making decisions, or they may worry about how the plan will reflect their success.
An owner may feel anxious about documenting (and making “official”) job descriptions, lines of authority, budgets, and marketing plans. An entrepreneur may dread such control measures, feeling that a business plan is just like having a boss!
If you build a house without a plan, however, you may find yourself living in what looks like a child’s play fort. Every stage is based on a sudden inspiration, and your new home becomes “curiosity run wild.” A quality architect begins with his or her final product in mind. To build a secure business, you must plan.
According to the Small Business Center at Bradley University, 70 to 80 percent of new businesses fail in their first year, and of those that continue past a year, only half survive to five years. Similarly, statistics from Dun & Bradstreet reflect that only 37 percent of businesses with
fewer than 20 employees will survive four years, and only 9 percent will survive ten years. In light of such daunting statistics, it seems foolish to take unnecessary risks – like failing to plan.
You may still be thinking, “I can’t make a plan, because things change too quickly.” Although constant change is inevitable in any business, a good plan can be your key to dealing with change. As a sailor, I view a business plan as similar to a centerboard on a small sailboat. Thanks to its centerboard, the boat can continue moving forward, as the winds shift direction; without its centerboard, the boat would flail around and eventually crash. A good plan keeps you consistently moving forward – sometimes slowly, sometimes quickly, but without crashing!
While writing your business plan, you may feel frustrated. After all, you will be writing your goals, without taking immediate action to reach them. You must understand where you are and where you are going, before going anywhere. Writing a plan can be exhausting, too. I guarantee, however, your listless feelings will disappear, as your business transforms from “doing just fine” to “doing very well.”
The following are some questions to consider while developing your plan:
- Why do I want to start my own business?
- Have I found the right business for me?
- Who are my customers?
- What do these customers need that the market is not currently providing?
- How will I reach them?
- What will it take to reach them?
- How much will it cost to provide for their unmet needs?
- How much are they willing to pay to meet these needs?
• Can I make money at this business?
Copyright 2021 Terry H. Hill
Terry H. Hill is the Managing Partner of The Seaplace Group, LLC. is a veteran chief executive, his three-plus decades of work with business owners, executives, and employees of privately held companies have been instrumental in helping them deal with the challenges they face in each stage of their business life cycle. Terry is the author of the book, How to Jumpstart Your Business, a practical guide for down-to-earth answers to questions and challenges that every business owner and executive faces.