Why Do I Need a Business Plan?

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By Elena Vasconez, Mi Casa Resource Center, Denver
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Businesses, regardless of size, succeed or fail for a variety of reasons. Hard work, persistence, the appeal of an innovative product/service, persuasive marketing, consumer demand or need, can all play a part. Some say luck has a role. Others say it’s a matter of being in the right place at the right time.

In still other cases, management is committed to addressing all the important aspects of ensuring the success of the business. Creating a vision, achievable goals, and a strategy is followed by developing a well thought out business plan, which is followed by the implementation of that plan.

It would be natural to assume that good management and proper planning are the most common reasons for success. Certainly only few would consciously choose to let fate dictate their success or failure. While that may seem to be the case, the reality is that business owners frequently get tied up working “in” their business rather than working “on” their business, and never really take the time to plan for the future of the business. Plans make the future happen, or to quote the old adage: “If we fail to plan, we plan to fail.”

If you were to build a new home, would you just start nailing up boards, or would you go to an architect and have blueprints developed? Would the architect develop the final blueprints solely based upon your verbal description, or would he or she first submit a draft to help you crystallize want you want? Only when there is genuine excitement and approval of the draft will the final blueprints be developed. And so it is with strategic business planning.

Well managed, competitive companies have accepted the leadership challenge of creating a strategic business plan with a vision that is shared by everyone in the organization. In so doing, they position themselves to respond to opportunities, rather than react to market conditions and competitive pressures.

Planning the future of a business entails four stages:

  1. Visualizing and identifying the future as the business owner wants it to be.
  2. Understanding the current market condition both inside as well as outside of the business.
  3. Determining the goals the business must achieve and establishing the necessary action steps.
  4. Implementing the plan.

Too many business people view weak market conditions or a poor economy as the reason for their lack of success. However, even in the worst economies, business leaders in every field emerge victorious. Why? Because they realize that success is not based on the conditions of the world, but on the decisions they make and the goals that they choose to set and achieve. Success doesn’t just happen. It happens because the business owner predetermines his or her success by writing a business plan and setting achievable goals, and then making them happen.

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