Small business owners know how to run their businesses. But in the rush of day to day operations, they sometimes forget the bigger picture of their long term goals. To keep the long term focus, they need a business plan.
A business plan is a road map of where you want to go and how you will be getting there. There are volumes upon volumes of theory on how to write a business plan and why you need it to get financing for your business. Books will tell you how to create one that will appeal to the kind of lender you plan to approach. We are not going into all that here. Lest just look at how the business plan helps you run your business.
- You had an idea and made it reality. Your company is a living entity with joys and sorrows, successes and failures. Its part of who you are. But this is not necessarily a good thing all the time.
- You need to be objective in business. You are going to have to take tough decisions, take risks and often do things you do not like to do. But to be able to make the right decisions they need to be based on the larger picture of your business, not knee jerk reaction to current issues alone. That’s where the business plan comes in. It keeps you focused on the big picture.
- The business plan is not just a monthly target you need to reach, or even a six month one. It should be a long term one of what you plan to do for the next 3 to 5 years. Within this context you can create sub plans for shorter durations. Just be sure they never deviate from the larger picture.
- The business plan is your best business friend. It should be with you always and be in your mind when making decisions or taking any actions. The business plan defines every stage in the growth of your business and how it should be achieved.
- It should have milestones against which you can measure your progress so that if you exceed your expectations you can analyze what do did right and build upon it and when you fail, you can do the same thing so you do not repeat the mistakes.
- The plan should contain:
- Your growth targets, both in terms of volume of business and profits.
- How you plan to achieve these – what are the resources you will need, when you will need them and how you will pay for them.
- What actions you need to take today so you are strong tomorrow. For example, you may have no competition today, but it will come. Are you checking to see what is brewing? Have you plans in place to deal with it?
- And just about everything else you can think of that could affect your business.
- Your business plan is your guide to success. Consult it and follow it.
- Keep it clear and to the point.
- But circumstances and objectives can change. When needed, do not hesitate to change your plan. Just make sure that the changes you make are done with a long term perspective and short term issues do not affect the larger picture.