Although business plans are a requirement for getting funding, this is not the only reason to plan. Savvy business owners develop a plan so they can plot their course, think through their business model, price out their offering, consider what staff they will need, examine their cash flow, plan out their marketing activities, and do 100 other things. Business plans are a clear and concise way to get your ideas down on paper to chart your course.
When considering your business plan, beware of the eight classic mistakes that most business owners make when it comes to business planning.
1. Not having a plan. Not having a plan is like flying a plane without navigation. You can do it, but why would you?
2. Not using the plan you have. It is a measurement and a way for you track how you are doing compared to how you thought you would be doing (projected vs. actual). A business plan is an asset to a company.
3. Not using the plan as a performance measurement from year to year. Your business plan measures a variety of things, so that you can determine how you are doing from year to year.
4. Not base lining performance into yearly and quarterly goals. If you can’t measure it, you can’t manage it.
5. Not forecasting sales, cash flow or overhead. All financials have to be forecasted so that you know what you are aiming for. When you set goals, you normally consciously and subconsciously take steps to make them happen.
6. Not having a contingency plan as a back up to the main strategy. Hope for the best and plan for the worst. By having backup plans, you enable yourself to launch Plan B when you see that things aren’t working.
7. Not sharing it with key people in the business. Managers and key staff should see the business plan, and key advisors should provide feedback.
8. Not writing it down. Writing down a plan is 90% of the battle. It reminds you of what you wanted to do and keeps you on course.