Running a business without a business plan is like rock climbing blindfolded. Your chances of making it successfully to the top are slim. And the process will surely be a death-defying one.
A business plan is a step-by-step guide to running your business and creating a product or service that will make it successful in the marketplace. You and your business plan must be flexible. Your plan will need to be adjusted periodically depending on opportunities in the marketplace, the current health of your business etc.
Every business should have a plan. It may be formal or informal, it does not matter so long as there is a plan. For example, the fish-and-chip shop may not have formally written down the plan, but before setting up shop, a smart owner would have assessed the need for a shop in that area of town, the ability to attract clients there, the appropriate amount of stock to carry, the cost of utilities and the parking availability for clients etc. The owner who waits to figure these things out using trial and mostly error will be lucky to be left with his/her wits, much less any customers.
A business plan minimizes risks and surprises. Consider the following for inclusion in your business plan:
- A reasonable expectation of profitability and when?
- How will the business pay you and any team members?
- The estimated expenses?
- The pricing strategy?
- The need for what you are offering, and what profit margin can you expect?
While much of this may have occurred to you, it is very important to write it down.
A documented plan:
- Helps you determine and coordinate all aspects of business operations.
- Gives you a means to analyze and determine what might be the best change to boost your business out of a stagnant situation.
- Assists you in determining the risks and benefits associated with any changes.
- Decreases your chances of making a mistake or not considering important factors in your business
So, do you have a Business Plan? If not, consider discussing the need with Accountant.