Why Business Plans Don't Work And What To Do About Yours
We're not unusual people. You and I have the same basic needs that everyone else has, and we operate in the same environment that everyone else does. So when we take a look at the why business plans don't work, it's our own life experience that is informing us. We've all been there: The New Year's Resolution to get organized or start on some long-term project or even just to maintain what we’ve got going on around us. And then, as days go by, weeks pass by and months slip away, nothing really happens because it was just too difficult to maintain whatever was being attempted. You know the drill.
But if it is to be done, it must be done. We have to find a way. So we get ourselves in front of the computer screen and begin to research our options for doing something about whatever it was we were trying to do in the first place. We might even find some resources that are out there and can make sense of this whole idea behind business plans and how this type of planning works or doesn't work. But no matter how well we research, however many books we read, blogs we read or how many different videos or podcasts we listen too, all of this information may result in no real improvement in our business life.
A Lack of Necessary Resources
When we talk about why business plans don't work, what we are really talking about is a lack of necessary resources. If you are running a small business without a plan, even if you have been in business for decades, it is a safe bet that you are missing the most important resource of all - cash flow. You know that the cash flow has to come from somewhere, but the reality is that big corporations have departments dedicated to their profits and growth. You may not have these resources at your disposal or maybe physically available or even available on an ongoing basis. But if you didn't plan, realizing this and beginning to develop a plan now may be what is needed to begin to solve this problem.
Necessary Resources
Creating a business plan is not a once in a lifetime event. It should be something that is done continuously throughout the life of your business. The basic components of having an ongoing, necessary resource are:
1) A cash flow forecast in all twelve months – month to month, year-to-year and five year projections (if applicable). 2) Both an income projection and an expense projection. 3) An analysis of how the market fits into the overall financial picture. 4) But the most important part of the plan is your vision, which is much more than a mission statement. 5) A review of how you are measuring up against your goals 6) A review of your goals and how they were originally determined
When you begin to create a plan, remember that business plans don't work unless they are used. Creating a plan is not just something to do once or twice. It's not a process that takes place during one weekend retreat or one late night session. It must be ongoing and something that you can refer to when it makes sense in terms of what you are about in your business endeavors. The first step has to be done.
Creating a Business Plan
Many people prefer to hire consultants to help them create a business plan. If you do this, expect to pay $1000-$2000 for the work. But if you have been in business long enough, you know that you do not need this kind of assistance. What you need is the writing skills and wherewithal to create your own written plan.
The first thing that needs to be done is decide what your objective is and then decide how best to achieve it. Once these first two steps are achieved, you can begin the research and development process.
To write your plan, gather all relevant material together for your business. From your accounting records to all of the other necessary forms that you receive or have created for your business or even to additional information you may have with other people in your organization. Write out a clean list of questions you want answered based on the material available to you, and then put them in order from high-level goals, to low-level goals.
Once this process has been completed and the final list is complete, begin writing all of those answers that seem most important as they relate directly to your area of operation. One note however, all of this information should be written as though you are explaining it to someone from another dimension. It is not necessary to go into all of the details that would overload most people on something as basic as income, expenses, or cash flow.
The idea is to take this information and create a narrative or story that will make sense while still staying focused. There are several ways you can do this:
1) Simply write out every question and answer. 2) Even if you think it is obvious, always include the question and then write out the answer using brief sentences. 3) Use examples from your business that explain what may not be obvious to those who might read your plan. 4) Give bullet points or a list of actions you want to take to achieve your objectives. 5) Use charts or charts and graphics that are easy to understand and relate to what you are trying to accomplish.
The final piece of this whole process is to have someone else read it, but do not expect them to be a professional business writer. You need someone with common sense who can understand the basics of what you're writing about. This person should be able to work with you and help get your message across in a clear manner without being overwhelmed by all of the technical jargon that is typical in business planning.
Once you have completed your final draft, submit it to a professional proofreader who should be able to help spot any errors that may make your plan difficult to read.
There is an old saying that says "You can't manage what you can't measure." Business plans are about planning for success. If you want your business plan to do the best job possible, consider using a business plan software package to help create and manage it.
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