Business Plan -why they are essential

Business plans-why they are essential: (GoArticles.com) by Dave

Well-constructed businessplan is an absolute must these days.
Why? Because it shows that you have a clear vision of where you want to take your business, and how you are going to get there. With world economies shrinking as the global financial crisis worsens, small business insolvency rates are on the increase, and indeed many experts predict that the negative impact on small business owners, and their employees, will reach levels not seen in decades. In the current environment, many small business owners are seeing reductions in sales volumes, and are finding it tougher to compete as margins shrink. With all of this gloom and doom about, you need to ensure that your business is as efficient as it can be, that it is able to respond to upcoming challenges, and that you are in the right position to take advantage of any opportunities that arise.
Where to now? A carefully developed business plan should identify the priorities for your business for the next year (at a minimum), and should also look further a field (perhaps the next 2-3 years).

Many businesses find value in involving their employees in the planning process. This can be a valuable experience for all involved, as it can help build team morale, and can quite often uncover some great ideas from your employees. First of all, start off by thinking about your business' mission statement. This should reflect where you want to be and how you want to be seen. Perhaps it may be something like "to be the number one widget retailer in the city", or "to be the first choice for widget buyers". Then analyse where you currently stand in relation to your competitors. Then quantify what level of improvement you need to make to get to number 1. For example increase sales by 100%. Then, analyse the strengths and weaknesses of your business. Then determine what steps you need to take to achieve your goal. At this stage, you may find that you develop quite a list of items, and it's important to ensure that you don't go overboard, as having too many tasks may see you devote too much time to those things that are not as productive as others. Keep your list down to maybe 5-10 objectives, and stick to those that you think have the greatest potential to help you achieve your goal. You then need to break each of these objectives down into tasks. At this point you need to be very specific about what the task is, who is responsible for completing the task, how you are going to measure the results, what the timeframes are for completing the tasks, and how often you are going to review progress.

Now, look at the strengths and weaknesses that you identified earlier. What can you improve on, and what currently works well. If you have a business that has an employee performance system in place, then you can align their personal plans to your business plan, which hopefully results in everyone having a clear understanding of their roles, and ensures that you are all heading in the same direction. Document everything, and if appropriate give a copy of your plan to all employees. Keep a copy clearly visible on the wall or on a whiteboard, and regularly track your progress. You can involve your employees in this if you want. A well developed business plan can also be helpful if you need to apply to a bank for finance, and indeed many bank's insist on a business plan before they will consider providing finance. Business planning is not difficult, and if you follow my outline, hopefully you will find ways of improving your performance.


Dave, the author, has over 25 years management experience and has
also successfully run his own small business for several years.


About the Author
Dave tells you why a business plan is essential in the current
environment, and gives some tips on where to start.
For more helpful information, refer to Dave's website:
http://www.accountingtipsforbusiness.com