Why you need a business plan NOW, even though your not a start-up.

We all know we are supposed to draft a business plan prior to starting up a new venture. We understand the banks will require it to lend you money, or investors will require it, to help them determine if the investment is appropriate for them.

We also understand that the entrepreneur requires one for his own needs for many of the same reasons, as well as to help guide him through the maze of what to do, what the plan actually is, what the strategies are, and what the cash flow requirements are projected to be, and many other crucial details such an exercise will reveal that will help support the business owner through the maze of growth and development Issues.

I frequently hear entrepreneurs say ‘ …what’s the point, we all know everything will change the moment we open the door and will continue to change thereafter, so why bother, I know what my goals and plans are.’

I will not argue the obvious reasons why a start-up requires a business plan, other then to suggest it is foolhardy to not draft one to support a start-up, but what about an ongoing business, why draft one now, you are already well on your way and everything is pretty much moving along under its own inertia, good, bad, or in-between.

Here are the reasons you should write one immediately even if you have been in business for years.

1. Writing a business plan forces you to contemplate and resolve many issues you may generally understand but specifically may either overlook or not know. For example, a review of your competitive position, while generally understood, if researched may reveal much important data.

2. A financial cash flow pro-forma, while operations may control same, it is a crucial tool for understanding were your business is and what it requires to operate successfully, including what is required to fix it if necessary. How you are going to raise the capital required or how you will adjust to what you have to work with.?

3. A sales and marketing evaluation which will force you to create a strategy for sales and marketing , revealing how, what, when, and how much. Critical for success at any point in your businesses life and frequently changing as you develop and appropriate for review and recasting along the way.

4. Management and employee requirements. Are you on track or does it reveal weaknesses that must be corrected to succeed.

5. Capital requirements for growth and development. Do you know what you need, when you will need it, and how much it will cost? Do you have a growth and development plan, which may be different then your original business concept and plan?

6. Do you have an exit strategy? What is your philosophy? Do you have one?

7. Management strategy, do you have one?

Here is the point, your business is constantly experiencing change. Conditions in the market are also frequently changing and thus will require your adjustment. You are changing as well. Shooting from your hip means spending most of your management time addressing the brush fires and putting them out as they erupt.

Having a current plan, frequently reviewed and re-written based on changing circumstances allows you the opportunity to eliminate brush fires before they erupt, a very good idea indeed.

Re-writing, or writing for the first time a business plan a year or two or three after your start-up allows you the opportunity to reflect on what you have learned and adjust accordingly as certainly reality then is very different then what reality appeared to be when you began.

You have an enormous amount of information at your fingertips that you did not have when you began, evaluating it in the form of a business plan and converting information to an action plan is valuable strategy that could prevent disaster and lead you to success.

If you are involved in a workout, a restructure, or a turnaround, it is critical that you draft a business plan to help you define the objectives, timing and cash flow requirements and projected results. It is new ground and an unexpected, unplanned turn of events with new parameters. This absolutely requires a new business plan or the risk of failure skyrockets.

You can’t easily get to where you want to be without a map…and your business plan is your map.

None of this means your new plan will not have to be frequently adjusted for missed projections or additional unplanned influences, but at least you have a base point to work from, and that’s a huge advantage over having no plan at all.

Do it, you will not regret the effort. It will reward you with insight , ideas, and new strategies that would not have occurred had you not performed the exercise. It may be the difference between failure and success.

Call me if you ned help 413-549-2966. Norm will set up a no obligation teleconference.