“If you fail to plan, you are planning to fail!” This famous quote from Benjamin Franklin proves true when it comes to business.
Business planning is critical for any organization’s success. A well-crafted plan creates a roadmap of success for your company and marks out strategic tactics to achieve your goals. Devoting time to planning can lead to more long-term sustainability and keep your company on track. A common thread in failed businesses was a reported, “lack of business planning.” A study conducted by the Bureau of Labor Statistics showed 20% of small businesses fail in their first year and approximately 50% in their fifth year.
So, what exactly does business planning entail?
- Outlining your business objectives and laying out tactics to accomplish them.
- Conducting market research and analysis of your industry, competitors, customer segments, target demographics and financials.
- Consistently monitoring progress, and when necessary, employing mitigations and updating your plan to adapt to the changing market landscape.
Key components comprising a successful business plan include:
- Executive Summary – a company overview of goals, strategies and financial projections.
- Business Description – a synopsis of a business’ function, purpose, mission and values.
- Market Analysis – an analysis of a company’s industry, target market, competitors, customer needs and trends.
- Operations and Management – the organizational structure and key personnel.
- Financial Plan – financial projections such as cash flow statements, income statements and balance sheets.
Establishing realistic goals and allocating the time and resources to achieve these objectives also allows your business to establish Key Performance Indicators (KPIs) more accurately.
Whether you’re a veteran in your industry or a brand-new start-up, business planning is essential to navigating a path to success. It also serves as a tool to attract investors – if a plan is in place with realistic profit margins, it offers potential investors a sense of security in your business.
In closing, a business plan helps to identify potential challenges and opportunities while developing strategies to address them. Developing a comprehensive business plan allows you to enhance company operations to achieve long-term growth, profitability and ultimately sets your business up for success.
