Operating your business without a business plan is like going to the grocery store hungry and without a list. You end up with a lot more than you need—a lot more than you even want—in your cart. And you've likely upset your budget for the week. A few such carefree adventures and your budget are out of balance for the month or year.
To help keep your business on track, you need a business plan. This annual strategy exercise details the business's financial and funding information, its products or services, competitive research and analysis, marketing plans, sales plans and projections, and information about the key people and their roles. No matter your business's size or legal structure, the discipline of writing and maintaining a plan brings structure and organization to the company and validation and motivation to the owners. This can be an essential exercise for the entrepreneurial spirit. But this tool can only work for your business if you dedicate the time to write a plan and calendar it as an item for annual review and updates.
The mere exercise of writing out the details of your business and seeing them in print can reveal unnecessary duplication in some areas and gaps in others. With this information, you can reallocate resources as needed. Proactively addressing these structural issues before they manifest as problems keeps your business running smoothly and efficiently. Additionally, companies need cash to survive. Planning and forecasting each year is critical to understanding how sales and expenses affect cash flow. Finally, a business plan can keep you on track with long-term goals when tempting and unanticipated opportunities arise.
Over time, comparing your business-plan forecasts with your results will provide the data you need to validate business decisions—including the updates to the plan itself. Whether the business is meeting its targets or falling short, regularly having your "hands in the data" means you can spot trends and take action. For example, consistently hitting sales targets may mean it's time to evaluate an expansion campaign or re-evaluate and trim the marketing budget.
Always falling short of sales targets may mean the goals are too ambitious, or perhaps the sales team needs an additional resource. Working with new data allows you to take timely corrective measures. If the data reveals an issue, it's much less overwhelming to correct a slight deviation in the course than to be forced to re-chart the entire course. On the other hand, when the data reveals growth, striking while the iron is hot to capitalize on, that growth fuels the business with positive momentum.
Your business plan needs to cover a wide breadth of topics thoroughly. The Small Business Administration provides an excellent starting point for collecting the necessary information and beginning the writing (or updating) process:
Consider your audience when you begin to write or update a plan. If the plan is an internal document, you may be able to handle the process yourself. Consider consulting with your business planning attorney and tax professional to gather and discuss some of the necessary information. Suppose the company needs include financing, additional investors or owners, or anything else that may consist of an external review of the plan. In that case, the plan must be exceptionally well prepared, with information relevant to the decision process. In this case, you may consider hiring a professional writer to take your draft to the next level.
Writing and maintaining a plan can be challenging, but the benefits greatly exceed time and effort. Companies that have written business plans tend to perform better. While some business owners are comfortable writing their plans, many owners discover significant benefits after working with a professional. We provide business planning services for the complete business lifecycle, including shaping initial ideas, deciding upon and implementing the proper legal structure, crafting a comprehensive business plan, and more. Contact us today to discuss the following steps to getting your business plan underway.
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Austin, TX 78738