Of those, two-thirds will survive at least two years and 44% will survive at least four years. That’s the good news. The not-so-good news is that according to the National Federation of Independent Business (NFIB), over a business’ lifetime, 39% are profitable, 30% break even, and 30% lose money.
If you’re in business for yourself, one of your likely goals is to do better than break even. You want to be in that top third that is actually making money. So where do people go wrong? One key reason why businesses fail is the lack of a solid business plan.
A business plan is your model for how you do business. It is a document that anyone can read to understand where your business is, where you hope to be in the future, and what steps you plan to take to get there.
Planning doesn’t have to be a chore. You don’t need a formal 50-page document that describes every facet of your business in detail. Rather, you need a workable plan that you will review regularly to make sure your business is headed in the right direction.
Planning is about controlling your destiny. It is about deciding what you want to accomplish and determining the required steps to achieve your goals. If you don’t plan, if you don’t set goals for your business, you are just reacting to whatever is happening around you. Here are a few more reasons why every business owner should write a business plan.
1. Develop confidence in your ability to run a successful company. You are the main stakeholder in your company and its most enthusiastic supporter. You believe it is worth investing a considerable portion of your time, money, energy and resources over the next few years. You must understand its strengths and weaknesses, cash flow, and realistic chances of success. If you can’t make a case for your business’ success on paper, you will have a very difficult time making it work in practice. A written business plan can give you the confidence to stand behind your business even when others aren’t supportive.
2. Clearly communicate what your business stands for. A business plan helps you share strategy, priorities, and action points with your partners, vendors or significant other. As you grow, you may need to hire employees, apply for a business loan, or develop business alliances. Your business plan can quickly explain to others how your business operates, what you sell, how you generate revenue, and who is in charge of projects.
3. Focus on a few key priorities that are crucial to your company’s success.Your business plan helps you determine which projects and activities will move you closer to your goals. As new opportunities arise, you can quickly determine if they are good fits for your business objectives.
4. Track your limited resources. Every business has limited time, money and personal, and it can be easy to underestimate the amount of resources each project will consume. Your business plan will help you track costs and manpower so you will know if you can take on additional projects.
5. Create accountability. When you create metrics for achieving your goals, you set benchmarks for how you will measure success. You will know if you are on track to meet the numbers or if you must rethink your strategy. When things go poorly, having benchmarks, metrics and a plan can help you break out of the status quo and move forward again because you know what to focus on and prioritize
When you have a plan, you decide in advance where you want to be. You create a destination and you set the course for how you might best reach that destination. When things go wrong or you learn your assumptions were incorrect, you can course-correct to get back on track.
Your marketing plan is a crucial part of any business plan. Download your free 45-page strategic marketing plan guide today at http://www.getclientstoday.com. This hands-on workbook covers the 6 steps for creating your marketing strategy and includes a fill-in-the-blank marketing plan template you can use to craft your monthly marketing plan.
Tags: enthusiastic supporter, federation of independent business, national federation of independent business, nfib, workable plan