Have a Plan - But Why? (Fundamentals of Business #3)
Plans are important. Jumping in without a plan will most likely spell disaster for a new business. The processing of planning can help you find your strengths, avoid your weaknesses, and build up your confidence in what you’re about to do.
Now, it’s very important to realize two big things that a business plan is not:
A plan isn’t magic. Planning can’t make the impossible happen. You can’t scheme your way out of reality. A plan needs to have realistic assumptions about yourself, your clients, and your market.
A plan isn’t foolproof. Just because you have a sound plan doesn’t mean that everything will turn out that way. There could be mistaken assumptions or unexpected events that invalidate parts of the plan. You can also get into the business and realize that you want to take a slightly different direction. A plan is a guide, it’s not a contract.
Well, if my plan is going to get thrown out anyway, what’s the point? Well, there’re a few major benefits you get from the planning process:
A plan will make you think. Having to write everything down makes you think about the business as a whole and also about all the steps you will have to take in order to get to success. If you approach the process openly and honestly, it will unmask some of your fears and the areas that you haven’t fully considered about what you are about to get into.
A plan gives you something to discuss with others. It’s typically easier to frame a discussion about your business, its goals, finances, and objectives when you have it more fleshed out than just your own thoughts. People you work with can take the time to read your words and look at your numbers and then come back to talk about their take.
A plan lets you be accountable. Your plan gives you something to look back on at different points in the future, to let you assess if you are meeting your goals and doing the work you should be, and if you need to make course corrections. Most small businesses lack easy bases of comparison; your own plan can help you have at least something objective to look at when you need to check your status.
Going in without a plan is driving without mirrors; you may be okay for a while, but something bad is bound to happen eventually. Next time, we’ll talk about the actual planning process and how to make something you can use.