3-2 BUSINESS PLANNING

Business planning is one of the most misunderstood and least used techniques. Regrettably, it is lacking in many small businesses. In fact, most people spend more time planning their holidays than they do their businesses or their lives. When you start out on a journey to an unknown destination, you obtain a map, review where you are now, where you want to go, and how you will get there.

The Business Plan is a written summary of what you hope to accomplish and how you intend to organize your resources to meet your goals. It is the road map for operating your business and measuring progress along the way. The Business Plan identifies the amount of financing or outside investment required and when it is needed.

First impressions are important. A well-organized plan is essential for a lender or investor to assess your financing proposal and to assess you as a business manager. By committing your plans to paper, your overall ability to manage the business will improve:

• You will be able to concentrate your efforts on the deviations from the plan before conditions become critical.
• You will also have time to look ahead and avoid problems before they arise.
• You will be able to identify your customers, your market area, your pricing strategy, and the competitive conditions under which you must operate to succeed. This process often leads to the discovery of a competitive advantage or new opportunity as well as deficiencies in your plan. A few hours spent every month updating your plan will save you time and money in the long run and may even save your business.