Why business planning is not just for start-ups
Business planning includes all of the goals, strategies and actions you plan to take to ensure the survival, prosperity and growth of your business. Every new business needs a business plan , a detailed plan of how you will develop your new business, backed by research, to determine if the business idea is viable.
If your new business idea requires investment capital, you won’t be able to get debt or equity financing from financial institutions, angel investors or venture capitalists without a solid business plan . But business plans are not just about getting money; even businesses that don’t need a financial investment other than what their new owner can provide need it.
The business plan includes all the general planning that needs to be done to start and operate a successful business, determining the scope of competition and how your new business will fit into the industry at identification. your target market and planning the steps to achieve them.
Scheduling activities after startup
The business plan is not a business planning exercise to do and forget, but a living document that needs to be updated throughout the life cycle of your business. Once the business has officially started, business planning will move on to establishing and achieving goals and targets.
Although some companies make business planning an annual event , business planning is most effective when done frequently and consistently.
The process of reviewing progress in achieving the company’s goals and targets and setting new goals and targets should take place at least once a month.
A key section of the business plan that needs to be updated annually and monthly and / or quarterly is the sales forecast . The sales forecast is an estimate of the sales of goods and services that your business is likely to make during the forecast period and the estimated profit.
Forecasts should take into account trends in your industry, the economy in general and the anticipated needs of your major customers.
Cash flow analysis
Cash flow analysis is another crucial part of business planning. It is vital for businesses to avoid prolonged cash shortages, as statistics show that more than three-quarters of business bankruptcies are caused by cash flow problems.
Your business may have a large and lucrative order in the books, but if it can not be billed before the end of the work and you need to hire staff, buy inventory, etc. to complete the project, you may have cash flow problems. Regular cash flow projections are an important part of business planning.
Daily activity planning is an incredibly effective way for individuals to focus on achieving their own and the organization’s goals.
Emergency planning for the company
In addition to business planning for profit and growth, your business should have an emergency plan. Emergency business planning (also known as business continuity planning or disaster planning) is the type of business planning that is designed to deal with crises. A business contingency plan is a proposed implementation plan to deal with a new emergency, new event, or new information that could disrupt your business. The objectives of an emergency plan are:
- Ensure your safety and that of your employees and customers in the event of a disaster (fire, flood, robbery, loss or breach of data protection, illness of a key employee, etc.).
- Make sure your business can resume business as quickly as possible.
Business Succession Planning
If your business is a family business or if you intend to run it by family members in the event of retirement or illness, you should put in place a plan to transfer control of the business. Management, ownership and tax issues can cause a lot of disagreement within families, unless there is a succession plan that clearly describes the process and has already been reviewed by all parties involved.