Friday, January 29, 2010

Why is Business Planning So Critical to Business Success?

If you don't know where you are going (i.e. have a roadmap), then how do you expect to get there? Running, expanding or starting a business without a business plan is like trying to drive from New York to Chicago for the first time without a roadmap or MapQuest!

Planning gives you a path to follow, otherwise, you are just guessing. In running or starting a business, the learning curve is short before you run out of resources and are forced to close.

Therefore, a business plan helps you set up a sound framework, model and system ahead of time, as well as, address potential problems and threats, so that you can capably run a business.

If you don't have a system in place to deal with problems and you don't have a sound strategic plan in place, you will find yourself needlessly sidetracked by working "in" the business instead of "on" the business.

A Business Plan will save you a lot of time and money. Careful planning ahead of time will help you wisely budget your resources and significantly minimize the time you spend assessing threats, problems, obstacles and opportunities.

A business plan actually creates the future you want it to be. It gives you the process to develop the future business you want, whether it is to successfully start, expand, acquire or build.

Granted, a business planning process can't predict everything and markets change very quickly; yet, a business plan puts a solid process model in place to deal with such unpredictability.

Otherwise, you will become even more lost in the unpredictable nature of future market changes without a system in place to deal with and predict these changes.

A business plan is an actual guide to starting, acquiring, expanding, building and managing a business. It is a step by step process that will guide you through the complexities and intricacies of building a successful company.

Business school will teach you something about business planning, an MBA will teach you a little more, but most good business planning experience comes from doing and learning from others who have gone before you. Find a good business plan mentor!

If you need to raise funds for your business venture or project, a well thought out business plan is the very best tool available to achieve the mix and amount of funds your business requires.

A good business planning process will actually determine and design financial structures which specifically address your funding requirements. Utilize a planning process to develop and design a financial structure customized to your particular company's requirements.

When times are tough in your business, industry or lending market, a good funding plan will give you a fighting chance of obtaining the badly needed funding.

A business plan is a fantastic communication tool. It establishes a system so that you can effectively communicate with your executives, managers, employees, shareholders, investors, lenders, customers, potential customers, markets, suppliers, on down the line.

So many companies fail because effective communication was significantly hampered by assets and people doing contrary things.

Effective strategic planning within the business planning process establishes strong communication ties, links and systems so that all the fore mentioned human variables can come together in a directional, well coordinated strategy for success.

Nothing stays the same from one day to the next in this global, fast tracked business world. Because of this constant change, your business will quickly fall behind and suffer without having a good business plan in place.

A plan puts a system in place to identify and address changes in the market place so you can proactively seize and turn them into opportunities.

Without a forward thinking system in place, changes in your market place can quickly become insurmountable problems and obstacles. A business plan empowers you to convert these changes into opportunities and increased profitability.

Operating a company without a well developed business plan is just like operating a car blindfolded, driving down an expressway in LA. You wouldn't blindfold yourself and drive down a busy expressway would you? Why would you do that with your business, future and money?

By : Frank_Goley

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