Gloria F. Pobst
University of Georgia – Small Business Development Center – Gwinnett
There are many excuses for not writing a business plan – no time, too much uncertainty, too much change going on in the business, industry or market. Operating any size business without a business plan is perilous, especially in challenging economic times. If you had a need to borrow money, no lender or investor would be interested in talking with you without a written business plan. Why would you risk your time and money without one?
The process of putting together a business plan may be the most important benefit of writing a business plan. The process forces the business to focus on several critical areas:
– the product or service which the firm sells
– the market for that product or service
– the competition in that market space
– the operational details to get your product or service delivered to the customer (including the people to do the work)
– where the money will come from to keep the firm in business
By taking an objective look at these key areas of your business, you identify strengths and weaknesses. Strengths are areas in which you may have opportunities to create new products, tweak existing ones or add valuable services to enhance your positioning among the competition. Weaknesses are potential problem areas that you must address before they hamper your sales and profitability.
A business plan is meaningless unless it is communicated to all personnel within the company, implemented with care and tracked for results. The “money” part includes detailed forecasts of income and expenses (your budget) and cash flow (very important for managing peaks and valleys of sales in your business). Each month, it is essential to track actual income and expenses against your planned income and expenses. From this activity you can determine if there is a problem in your planning assumptions, or an issue you need to fix – such as wasted materials in your manufacturing process, opportunities to reduce office supplies or labor expense.
You will want to review your business plan on an annual basis and make updates for the upcoming year. You will have new data based on what you learned from the previous year’s plan – knowledge you would not have if your plan was not in writing. Committing your business plan to writing, rather than only having it reside in your head, enables you to communicate the plan, monitor the plan, learn from the plan and holds you and others in your firm accountable for action. It is a valuable part of your recipe for success.
Georgia SBDC assists existing and prospective business owners to grow or start a business by offering a wide variety of training, providing one-on-one confidential consulting, conducting economic development related market research, and providing technical assistance. One-on-one consulting services are provided at no charge; training classes have a nominal fee. For more information, contact your local SBDC office in Gwinnett County at 678.985.6820, or visit us on the web at www.gwinnettsbdc.org.