Why You Should Create a Business Plan
By Gene Siciliano
We all nod
knowingly when anyone talks about the importance of vision, mission
and business planning—and then most of us go back to what we were
doing before the interruption. As it happens, I often ask small
business owners if they believe business planning is an important
management tool. I don’t think anyone has ever said "No." But when I
follow up with the question, "Do you have a current business
plan?" only one in 10 answers "Yes."
not surprise 90 percent of those reading this article, I’m sure. But
why is it that most business owners (in my admittedly unscientific
surveys) see the value in business planning and then almost
universally forego it? Could it be because business planning is seen
missed any of your personal favorites? The truth is that business
planning is not as much fun as creating your own business. And it’s
certainly not guaranteed to accomplish anything, unless we actually
do something with our business plans, which of course means
more work. Business planning wasn’t on my list of reasons for
starting a business, either. But want to know something? It works.
And that goes a long way in my book toward making up for its
shortcomings in the fun department. If it does in yours, too, then
Reasons to Plan:
We’ve all agreed
that business planning is important, but why is it important?
After all, that’s a pretty big idea to accept on faith. I believe
there are four powerful reasons to create a written business plan:
The ability to see
exactly where you are going is greatly enhanced by the simple act of
writing it down. Unless you have extraordinary conceptual capacity,
you will only know what you want your business to look like by
writing it down. Include all the details you can think of to enhance
the picture. Some people are gifted with that kind of vision without
ever picking up a pencil, but for most of us the picture needs to be
more concrete. The more detailed the description of the end result,
the more easily you will recognize what you must do to get there.
When you are
traveling to a place you’ve never visited before, you probably need
a roadmap to help get you there: to recognize which roads to take
and which ones to avoid because they lead in the wrong direction.
Your business plan serves the same purpose in getting you to your
business goals, which is another “place” you’ve never been to
before. It’s much easier to avoid wrong turns when your best path is
laid out for you in writing.
Many of the people
you meet—employees, colleagues, customers, family members and
friends—will be instrumental in helping you achieve your goals if
you tell them exactly what you want to achieve. There is great value
in having an easy, concise way to tell others what your goals are
and how they can assist you. Making it up along the way will send
confusing signals to those who support you, rather than helping you
concentrate the power of their support in a common direction.
Often we hear
people speak of their dreams and goals in a way that tells us they
want to achieve them, but they don’t really believe they ever will,
or even can. A clearly defined business plan will reveal a series of
small, achievable steps along the path, and you can actually begin
to see how they fit into your grand design. Accepting the
possibility of success a step at a time is much easier for most of
us and can be the most important key to achievement. Your written
business plan makes huge goals somehow seem not only manageable, but
I believe you start
with a personal value-based vision statement, followed by a
congruent and carefully formed mission statement. Together, these
should be the foundation of your business plan. So what is the
difference between a vision statement and a mission statement? Do
you need both? I have for many years used a plain language
definition that goes like this:
Your vision is how you want the world to be.
Your mission is your contribution to making it that way.
look at it this way, it’s easy to see that you should include both
in your thought process. Whether they evolve as one statement or two
is unimportant. What is critically important is that together they
are the first step in your business planning process. About now you
might be saying to yourself, "Sure, all I have to do is decide what
I’m going to do with my life. And after lunch I’ll just zip over and
solve the Iraq and Afghanistan situations. Give me a break here!"
not suggesting that you only get one shot at this. In fact,
everyone’s mission statement will evolve over time, even if they’re
right on target, because the world changes and where we are in it
changes too. However, each change in you mission and vision
statements should be carefully considered, firmly adopted, and then
business plan represents a sizable piece of work. A life devoted to
building a business without a plan is considerably more work,
however, and usually for considerably less reward. By contrast, a
business plan that truly guides you in the direction you really want
to go brings daily rewards. Add up the value of greater work
satisfaction, the rich experience of a balanced life and a
successful business that’s meeting its goals. And unless there’s a
hole in your bucket, you will have earned some very large profits
along the way, and you’ll have had a heck of a good time doing it.
that exciting or what?
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