• A business plan is necessary for the entrepreneur to profitably make use of time
It's February! The year only recently started, but a full month is gone already. Next thing we know, it will be Easter, then Madaraka Day in June. Half the year will have passed by in a flash. Several months later, Christmas carols will once again be back on radio stations.
Time passes by so quickly that we must plan for it. Without a list of things to do and a plan on how to achieve our financial goals, we fall into the trap of doing pointless tasks that ultimately do not amount to anything. Time is money; wasting time means not exploiting opportunities that could take you closer to your dreams.
A business plan is necessary for the entrepreneur to profitably make use of his or her time. A business plan is a list of steps you must take for your business to grow and make money. It is like a step-by-step guide that will help you stay focused only on activities that will make a difference.
ACTION PLANS
The Oxford phrasebook of English describes a business plan as a document that sets out the goals of a business. In addition, a business plan sets the time frames within which those goals must be achieved. Goals must have a deadline or else they will never be achieved.
Most people groan when asked for a business plan. It seems a difficult document to compile. A business plan must be realistic and well thought out, but it doesn't need to be too detailed. There is no right or wrong way to write a business plan as long as it works for your business. Once in place, a business plan can help convince potential financiers, such as banks and venture capitalists, that your business is a viable concern.
MARKET-FOCUSED PLANNING
Financiers are more interested in how your business will perform in the market. The Harvard Business Review advises entrepreneurs that investors "want to put their money into market-driven rather than technology-driven or service-driven companies". The potential of your business or product in terms of market share, sales and profits is much more important to financiers than attractiveness and high-tech features.
As time goes by, a business plan is the tool to help you determine whether or not you are achieving anything in business. You must look at it regularly to remind yourself of what you must do to reach your sales targets, marketing expectations and profitability. Furthermore, a business plan can help you detect problems in the business before they become too big to tackle. For example, if you are spending too much on salaries, you may consider downsizing.
FLEXIBLE PLANNING
Continuously adapt your strategies in line with changes in the business environment. Keep evaluating what steps are working and which ones are not. If something you are doing is not producing the desired results, try a different approach. With every success or failure, evaluate the lessons learnt from that experience. Such lessons will be useful as you continue implementing your business plan.