If someone were to ask you the definition of ‘planning’, you might reply that it referred to the act of creating a strategy, which led to a definite course of action. You have come up with this answer, because you are an entrepreneur or a business owner. Someone else in another occupation might suggest that it referred to anticipating future events and being prepared for them by assessing the nature of the current scenario. A third person could come up with the idea that it was all about setting goals and taking action to achieve each one of them.
Whatever is the case, it is obvious that proper planning plays an essential role in the success of any venture, especially a commercial enterprise.
Remember that you are entering a highly competitive world, especially in this era of globalization. Additionally, your products or services may not be unique. There could be several people selling the same things that you do. Observe selling and buying behaviors closely, in order to gain valuable tips about conducting business deals.
After all, you are putting up some kind of capital while launching your commercial enterprise. It follows that you are planning to succeed, and not to fail! Incorporate whatever knowledge you gain into your plans. Thus, planning at the right times will ensure that you stay one-step ahead of your competition all the time.
While it is important to have a detailed plan in hand while launching your business venture or during its buildup, it is equally important to comprehend why business plans fail! If the planners themselves are baffled about why things are going haywire, the non-planners remain equally flabbergasted too! Outlined below are a few reasons, which might contribute to the failure of even the best-laid business plans.
To begin with, you must realize that a business plan is akin to having a beautiful guide in your hand. It is a game plan, which will tell you what you should do, and when. Go back to your school or college days. Whenever you were a member of a sports team, you would get your heads together to discuss strategies for defeating your opponents as quickly as possible. It is the same with a commercial enterprise.
You must have a clear idea about which direction your business must travel, if it is to become a great success. It does not matter whether you are the lone entrepreneur or a partner in a group enterprise.
However, creating this guide is not easy. You must have some clarity about your start-up and its status in the marketplace. Even if you have already launched your business a few years ago, you will need to monitor its progress regularly. Are you sure about recovering your initial investment, or are you grappling with uncertainties and fears?
Are you confident about handling all kinds of challenges, despite the situation you find yourself in now? Question yourself with relevant queries like these, in order to know the exact position of your business dealings. Only after you gain satisfactory answers to your ‘own’ questions, will you be able to proceed with the documenting of a business plan, wherein you outline feasible strategies and the timelines for putting them into action. Thus, hastiness in the absence of proper investigation can cause your business plan to fail.
Secondly, the business plan is your metric for measuring your success or failure. This is because any kind of plan will not fail to mention your business objectives and goals. Every objective/goal will have an action plan associated with it, for its fulfillment. Therefore, these objectives/goals become the benchmarks against which, you may evaluate the performance of your business dealings. In case, you have managed to achieve the set targets, or even surpassed your wildest expectations, you may celebrate the success of your business! On the other hand, if you have not managed to reach your set targets, you will only have to determine to work harder.
While all this is fine, you must note that the key word here is ‘clarity’. Yes, you must ensure that you outline every objective/goal clearly and realistically. Then again, it must be attainable and not some out-of-reach fantasy! Finally, it should be measurable and have a deadline for achievement linked to it. To sum up, every goal/objective should be definitely quantifiable.
Bearing these facts in mind, go through your organizational objectives and goals once again. If any of them sound quite vague, use language that is more concrete in nature. In case, a concept seems too broad and unrealistic, split it up into smaller goals/objectives. This will help you move one-step at a time.
Unfortunately, few people have the patience to go through with this exercise, believing that ‘mental’ understanding is enough. However, this will prove unhealthy for your business. Therefore, learn to be a patient and persevering business owner or entrepreneur.
The third advantage of having a business plan at the ready is developing the competence to distribute limited resources in the most fruitful manner.
For instance, your business is brand-new or just a few years old. Naturally, you cannot have had the time or the budget to place plenty of resources at its disposal. One such resource is finance.
Every program, and every strategy, needs some funds, in order to go through successfully. However, you have several programs and strategies to handle. Prioritize which ones deserve greater attention, and grant them the necessary funds immediately. The others can wait for their turn! It is the same with the allocation of human resources too.
Now, when going through this exercise, please note that you have to keep track of the dynamism of the environment, within which your business hopes to survive. There are bound to be occasional or even rapid changes in this environment. The changes may relate to legal affairs, social events, advancements in technology, cultural understanding, demographics, or heightening/lessening of competition. If you fail to keep the above-mentioned aspects in view, your business plan will be of no use to you.