Countless businesses in the United States operate without a plan. Many entrepreneurs know their company thoroughly, but employees may not understand vital components of the organization without a tangible reference.
A well thought out business plan provides a guideline that shows where the company has been and where it prepares to head in the future.
Business plans help to establish budget needs, target markets and include any additional market analyses that may need to be conducted.
Gladys Edmunds of USA Today said operating a company without a business plan throws every part of your life and business out of balance.
All good plans should include an executive summary, a short description of the business, the marketing and sales strategy, competitive evaluation, expansion and improvement areas, management team and personnel, operations, and a financial forecast.
Michele Cuthbert of Baker Creative in Groveport, Ohio describes a company’s business plan as the skeletal system of the company with various components that ensure its health and vitality.
“Today’s marketplace shifts happen quickly,” Cuthbert said. “Having a company’s vital components identified in advance helps businesses move ahead intentionally, not just by happenstance.“
Financial investors often base their decision on whether to back a company on the business plan’s ability to identify financial performance measures based on a company’s previous years of operation and its forecasts.
“Investors want sound evidence that their funds will grow in an organization before they take the risk,” Cuthbert said. “If they don’t see the data, chances are they will move on to an opportunity that they interpret as more financially solid.”
In an article published in Broker Magazine, Lee Diercks, principal and managing director of Clear Thinking Group, LLC recommends that companies conduct SWOT (strengths, weaknesses, opportunities and threats) analyses to ensure accountability of all variables that affect the company.
“It’s vital for organizations to examine what they are doing well, what ‘issues’ are presently at hand, where the biggest opportunities for improvement lie and what external issues (such as economic, competition, consumer change) come to play,” Diercks said. “ Conducting research to determine market position is also essential, as are solidifying organizational objectives and building a conservative plan from the bottom up.”
The lack of time spent creating a company’s business plan is often the biggest factor impeding its success. Many companies take short cuts and do not put in the effort needed to establish a thorough proposal.
Consultancy services that specialize in plan development many save the enterprise time and money by conducting research and planning efforts more efficiently. Beyond initial planning stages, executives are able to conduct revenue-producing efforts without spending time on writing the plan itself.
Baker Creative is based in Groveport, Ohio. Find them on the web at Baker-Creative.com.