Planning Fundamentals

Researching your plan

An experienced pilot does not fly a risky mission without a detailed, well-researched flight plan. Yet people everyday, with minimal business management experience, try to operate businesses without active business plans. Why spend your hard earned savings on a business that proper research might have told you not to do in the first place?

The Business Plan is a written summary of what you hope to accomplish by being in business and how you intend to organize your resources to meet your goals. It is the road map for operating your business and measuring progress along the way.

Although it may seem an intimidating and time-consuming task at first, a plan that does not capture the most relevant and appropriate data for your business venture will only serve to undermine your efforts. An effective business plan will make the best use of what is available at the time of research and preparation.

There are six fundamentals to keep in mind while working on your business plan:

  1. The Business Plan identifies the amount of financing or outside investment required and when it is needed.
  2. First impressions are important. A well-organized plan is essential for a lender or investor to assess your financing proposal and to assess you as a business manager.
  3. By committing your plans to paper, your overall ability to manage the business will improve. You will be able to concentrate your efforts on the deviations from plan before conditions become critical. You will also have time to look ahead and avoid problems before they arise.
  4. It encourages realism.
  5. It helps you to identify your customers, your market area, your pricing strategy and the competitive conditions under which you must operate to succeed. This process often leads to the discovery of a competitive advantage or new opportunity as well as deficiencies in your plan.
  6. Three or four hours spent each month updating your plan will save you time and money in the long run and may even save your business. Resolve now to make planning a part of your management style.