Are you an entrepreneur with your own small business? Or are you planning to start one soon? Having your own business is a goal for many people. For some, it means building something of your own, doing something that you are actually passionate about, and doing it the way you feel it should be done. For others, it’s a lifeline, a way to support their families.
We’ve all heard the dire statistics of far too many small businesses failing within their first five years, yet thousands of new businesses start up every year. And, that’s because we don’t believe those numbers will apply to us. We believe that our ideas are fail-proof, that we can make a go of it on passion and drive alone, and that the world will welcome with open arms what we have to offer. Unfortunately, if you and your business are going to thrive, you will need to lay a strong foundation for your business’ future.
What Motivates You
Entrepreneurism begins with an idea, but it is your passion and ambition that makes that idea a reality. Think back to when you first started your business, how excited and confident you were. It sustained you through long working hours and the false starts. It kept you going even when others couldn’t see it. Your belief in the idea made all your efforts worthwhile. Your passion and confidence brought you this far. Now you need something more. After all, the things that got you to this point can’t take you further. They can only help you tread water.
Treading water is not thriving. Treading water is not being successful. Treading water in your business is not sustainable in the long run, so you will need something more to help you and your business prosper.
Hope doesn’t take the place of a business plan. Most small businesses neglect to do is to create a formalized business strategy. A formalized strategy outlines the actions you intend to take to accomplish the goals and objectives you’ve set for your company. It includes the type of products and or services that you plan to sell, who your customers will be and how you will reach them. If your plans are aligned with the core values and objectives of your company and your intended actions are specific, measurable, attainable, realistic and timely (S.M.A.R.T.) then you have a strategic plan that can serve as your road map to making your company more successful and better performing than your competition.
Although most small business owners think the time and effort it takes to develop a sound strategic plan takes them away from the running of their business, there is strong evidence backed by decades of research and business expertise that a formalized business strategy will, in fact, help you build a better business. The following are five reasons to develop a comprehensive business plan that will keep you competitive.
It Will Help Keep You Up-To-Date on Business Conditions. today’s business environment is especially volatile, so fresh, up-to-date market information can provide useful insights into market conditions and trends that can help you understand how to better position your products and services against your competitors and improve your overall profitability.
It Will Help You Forecast Better. Because of the volatility of today’s business environment, your current business strategy can quickly become ineffective and even obsolete. Changing circumstances can require frequent modifications and adjustments to your plan in order to ride out temporary complications or to take advantage of new opportunities.
It Will Help You Better Manage Your Finances. Most small business owners understand the necessity of masterfully managing their cash flow, but many will experience cash flow problems from time to time that can affect the solvency and viability of their businesses. Understanding the highs and lows of your business cycle can help you make the best use of your financial resources and keep a handle on your cash flow.
It Will Help You Make Better Decisions. Running your business in perpetual crisis mode is simply poor management. Short-term crises are always urgent but not necessarily important. Sometimes, they are just distractions. By following your business plan, you can determine whether an alleged crisis is: both urgent and important; urgent but not important; or neither urgent or important to your goals and/or your customers’ needs and interests. It will serve as a reminder of the key drivers of your business so that you are able to stay focused on your priorities and mindful of what is just a distraction and what you really need to stop and pay attention to.
It Will Lead to Life-long Learning. Some entrepreneurs who have found success, often find it difficult to listen to and take the advice of others. However, if you are going to make the most of your opportunities that can benefit your business, you may need to acknowledge your limitations (we all have them) and allow yourself to learn from others. It’s always possible—and even highly likely—that someone can say something or show you something that can help you realize the full potential of your business and prepare you for the challenges ahead.
In sum, preparing a formal strategic plan is no small task. Rarely can it be accomplished in a single day, and it should not be taken lightly. It demands our full commitment, forcing us to sometimes make difficult decisions and stay the course–even when it takes us out of our comfort zone. Creating goals is the easy part of the plan, and there’s no denying its importance in shaping the way we think about our business’ future, but to turn our vision of this future into a reality, we need to formalize our goals and outline each action we intend to take to accomplish them.
To do otherwise leaves us adrift, not knowing what we should be doing day to day, what we want to achieve in the short- or over the long-term, and unable to make good, informed decisions on matters of importance.
To beat the odds, and avoid becoming another dire small business statistic, we need an arsenal of tools and strategies to help us stay on solid footing. Our strategic business plan is one such tool.