While I have often heard and admittedly myself on occasion said “It’s better to be lucky than good!” ? such a motto is certainly not a credo by which to run a successful business operation. That is, most business owners have created, at some point, a formal business plan, probably for use in obtaining a loan or attracting investors. Similarly, entrepreneurs generally understand that a successful business requires articulation of a focused objective and development of a systematic course of action to achieve that objective.
A business plan is intended to establish the processes and detailing of the day-to day operations of the business in an effort to aide the company in reaching its long-term goals. Because an effective business plan involves strategic, long-range planning and analysis, it requires time to develop. No doubt, finishing a formal, thoughtful business plan gives a business owner a sense of accomplishment and direction just by having it completed, as creating a plan forces a business owner to examine many facets of the business never previously considered. Though a company’s business plan may have proved to serve as a successful tool in obtaining bank financing or attracting investors, too often owners put the plan on the shelf, allowing it to grow stale while they turn to work in the business, often managing from one crisis to the next.
Maybe it’s time to drag the business plan out, dust it off and put it to use! Does the plan still fit with the company’s short- and long-term goals? If so, is the company and its management on pace with the plan and milestones set forth? If not, now may be the time to re-evaluate your business plan or to re-evaluate the way the business is operating and get it back in sync with the strategic plan.
A business plan can serve as an effective ongoing business tool in several ways. For example, a company that is evaluating a new venture can refer to the long-term strategic planning and identify how a new venture may enhance the company’s profits, image, market share or conversely how the wrong new venture can be detrimental to the company and the long-term objectives. A business plan can be an effective monitor of the company’s performance, including cash flow and profits and help identify trouble early on, enabling the company to take corrective action. Ongoing assessment of performance against the plan may indicate that a new, higher profit margin product is needed or slow moving products or services are shrinking profits and should be discontinued or marketed differently. A business plan assessment may also help owners to understand changing pressure points and vulnerabilities of the business. Comparing plans to results can identify potential opportunities and even minor tweaks can create vast improvements in profitability and reputation.
SMART TIP: If you haven’t looked at your business plan recently, it may be time to pull it out and dust it off. If you would like assistance in evaluating your business or help in development of a business plan, we encourage you to seek advice from legal and business professionals. ?The Attorneys at The AR Group can help! If you would like?help with you with your business plan,?please contact Jeanette at 720-452-3333 or?jeanette@theARgroup.com.