Nothing is guaranteed in business particularly in the early stages. In fact, nine out of ten startups will fail.
There are many reasons for this failure – they might not invest in marketing their business properly or perhaps there isn’t even a market for their product.
Maybe the owner thinks that it will be far easier than it is or they hire a weak management team.
They may, of course, simply have run out of money and ultimately this all means that they didn’t have a very good plan if they had one at all.
This is why it is imperative you have a business plan if you want any chance of avoiding the above and instead of being in the 10% that succeed.
You know the saying, fail to plan and you are planning to fail – this is never truer than in business.
You can’t just cross your fingers and hope for the best – you need to know exactly what you are doing and how that will get you to where you want to be, in order to have any chance of growing and progressing.
When writing about why you need a business plan, Alan Gleeson says:
“When I am asked to explain why business planning is so important, my first inclination is to quote Lewis Carroll. In Alice’s Adventures in Wonderland, Alice comes to a fork in the road and asks:
“Would you tell me, please, which way I ought to go from here?”
“That depends on a good deal on where you want to get to,” said the Cat.
“I don’t much care where,” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
For me, this scene encapsulates perfectly the problems of not having an over-arching goal and plan for your business.”
To not have a plan means you are doing day-to-day tasks without considering how they are going to benefit your business not just right now, but going forward as well.
Here are just a few reasons that show just how important planning is when starting a business.
Look at how you are going to spend your money
It is vital that you have a plan when it comes to spending because if you invest everything you have into a large, expensive office space with a long lease and then realise you don’t have anything left to spend elsewhere you will find yourself continuing payments for a space you can’t afford to actually do any work in.
You must know your budget down to the last penny and think carefully about how you will spend this, keeping in mind what will move your business forward and what can wait.
Work out who to hire and when
if you just start hiring without a plan you could end up with far too many employees in job roles that aren’t really benefitting the company.
You need a plan about the roles that are required immediately and who you will need to employ and when as the company grows.
Understand how to market your business
You must market your business because if no one knows you exist they won’t use your product or service and therefore your company will never grow.
This doesn’t have to be a huge part of your budget; initially, you could set up social pages or get business cards, leaflets, posters and roller banners.
But there are questions you must ask yourself which is why you must plan, such as: who is my target market? How do they consume content? Where are they and when?
Look to the future
A plan will help you to look at where your company is heading in the long term, it will enable you to set goals and ensure you are working to achieve them.
It will also allow you to see if you reach objectives, celebrate when you do and work out what went wrong when you don’t and, of course, rectify it.
If you are starting a business and don’t have a plan, stop everything you are doing and draw one up – you will waste a lot more than time if you don’t.