Many small business owners start their businesses without a business plan and continue in business for many years using the seat-of-the-pants theory of management. On the other hand, there are large companies that have troops of employees and consultants trying to prepare for the future.
When a person starts a business, he or she has a plan. Whether that plan is written and follows established procedures to evaluate possible is success is another issue.
Is it valuable to have a written business plan when starting a business and as the business continues in operation? The answer is unquestionably “yes.”
The initial plan helps map out a clear direction for the new operation. As importantly, an initial plan will force consideration of factors and circumstances that might not otherwise be considered. These factors and considerations may cause an entrepreneur to consider carrying both red and green jelly beans.
Because business plans attempt to address the future — which is difficult to do — it is almost certain that the business plan will be updated over time. A business owner must constantly be aware of circumstances in the World that will change the circumstances of the business. A clear example of such changes is the business of operating a newspaper in the age of the Internet. Failure to prepare for changing circumstances can destroy a business.
In addition to being aware of changing World, national or local circumstances that can change, a business must know its customers and suppliers and plan for their changing circumstances. A business’ knowledge of the needs of its customers and suppliers and meeting those changing needs can mean the difference between success and failure.
Remember that a business plan is not static, it must change if a business is to survive. When preparing a plan, it is worth the expenditure of time and money to get the input of others who know circumstances that might be unknown to a new business owner. Such persons include an experienced banker, accountant and lawyer.
Planning a business, whether at the outset or over time, is one of the keys to a successful business.