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How a Business Plan and Strategy Benefits Small Business
I’ll admit that I haven’t always been a planner. For me, a plan meant getting locked into a set structure with little room for spontaneity.
By nature, I’m an adventurer who loves to explore. And I did. I often jumped in the car without a plan or direction and traveled back roads through rural areas in the Northeast of the US. Those roads often led to some of the most incredible off-the-beaten-path places. Places I probably wouldn’t have found otherwise. They also led to a few dead-ends, no phone service, and an empty gas tank with no gas station for miles.
After flying by the seat of my pants one too many times, I realized that planning goes a long way in helping to organize time and resources to achieve the best possible result. In business, this is especially true. As a business owner, you have a lot invested and need a return on that investment. Recently, I came across a Barclays study that indicated 47% of small business owners have no formal business strategy to support their business growth. Of that total, 25% have an informal, verbal business plan, while 23% have no plan whatsoever. Those statistics are shocking.
When you lead without a plan, you automatically position yourself and your business to work reactively versus strategically. Lack of a business plan results in 70% of business owners failing. A business plan and strategy is the most intelligent investment you can make for your business. Whether you are an aspiring or firmly established entrepreneur, the best chance to build a successful business is to grow from a strategic foundation. For a startup, it can help you understand if you have a viable product, program, or service. For seasoned entrepreneurs, it keeps you on track and focused. It’s the best tool for helping you evolve and pivot the business quickly.
Think of your business plan as a GPS that helps you navigate each stage of starting and managing your business. It provides a roadmap to structure, run, and grow your business. A well-written business plan serves as a tool to think through and detail all the critical elements of how your business will run. It helps you see the big picture and identifies critical milestones to reaching your goals.
For aspiring entrepreneurs, a business plan answers essential questions such as the best business model, the business’s future path, and how the company will reach its goals. Formal business plans serve several purposes.
A business plan helps you:
- Articulate your vision and describe your products, services, and programs.
- Understand your competition, the market you’re entering, customer trends and preferences, and potential roadblocks.
- Get a realistic perspective on the viability of your business idea and shine a light on the red flags and decide if you want to move forward, stop, or change course.
- Launch your business with a detailed roadmap that keeps you focused. It ensures you’ve proactively thought through every aspect of your business, critical decisions, and the goals you want to achieve.
- Seek unbiased, candid feedback from trusted professionals, family, and friends who often see things you don’t because you’re too close to the business. It’s an opportunity to identify potential issues and refine your plan before it impacts your business.
- Identify the people and skillsets you need at the table. Understanding the employees, advisors, contractors, and business partners, you need upfront saves you a lot of time and money once you launch.
- Find suitable suppliers by providing vendor standards.
- Establish and focus on priorities to allocate your time, energy, and resources wisely.
- Set realistic objectives and goals. Having a formal plan in writing creates a sense of accountability to focus on your long-term vision.
- Position your business to attract investors and secure financing. Any individual or organization considering investing in your business will want to know it’s a sound investment.
- Position yourself to make decisions proactively based on a strategic roadmap and long-term goals versus making reactive decisions on the fly that can lead to costly mistakes.
- Communicate your mission, vision, business goal, and projections with potential lenders, partners, suppliers, board members, employees, and clients who need specific details.
For established business owners, a business plan and strategy is a valuable tool to have as your business and industry evolves and grows. It is a living, breathing document that helps you adapt and pivot as circumstances and the environment requires it. The recent COVID-19 pandemic was a perfect example of needing a business plan to respond to significant market changes. When you keep your business plan current, you give yourself the gift of being able to navigate change and quickly pivot to keep your business on the path to success.
I have a small business. Why do I need a business plan?
While a formal business plan might not sound sexy, it forms the foundation of everything we build on as entrepreneurs and small business owners. It streamlines business operations, aligns business and brand strategy, and structures an integrated marketing and communications plan to support your business goals. When the business owner and employees understand the company’s goals, vision, and mission and how their decisions and actions affect the business, decision-making naturally becomes straightforward.
As a business owner, ask yourself…
“Do you want to grow your business from a reactionary standpoint? Do you want to spend time putting out daily fires and fixing problems with band-aids because you have no long-term plan or goals? Or do you prefer to be the forward-thinking business owner who knows the purpose and priorities of your company? When you work from a strategic foundation, you position yourself to understand your strengths and weaknesses and keep your eye on the big picture and goals. It means more efficiency, a more effective plan, and the ability to anticipate and negate costly mistakes.
Considering 50% of new businesses fail within five years when they lack a formal business plan and 25% of businesses without a plan die within two years of startup, why would you want to go on the journey without a roadmap?
Writing a business plan sounds overwhelming. I don’t know where to start.
Writing a business plan can be overwhelming and stressful for even the most seasoned entrepreneur.
But it doesn’t have to be. It’s important to know that you DON’T HAVE TO GO IT ALONE. The Business360 Method® can help. Book a FREE Business360 Strategy Session to get started.
We’re with you every step of the way to help you develop a plan that provides a roadmap that makes sense for your unique situation and ensures that you take the steps needed to achieve your goals. Our goal is to help you establish a clear roadmap for your business and an actionable plan to make your business thrive.
About the Author
Name: Tammy S. Drost
Professional Title: Founder and CEO of The Business360 Method®
Bio: With 20+ years as a Business and Brand Strategist, Marketing Executive, Creative Director, and Head of Operations in agency, corporate, and non-profit environments, Tammy recognized that regardless of industry and asset size, each organization faced similar challenges. Through a 360° approach, she implemented award-winning solutions for large, complex corporations and realized they could be tailored to small businesses.
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