This is a bit like deciding to go south for a holiday, getting in your car and driving generally towards the sun. You may get there but there'll be problems. Even worse, it's like deciding to go to Europe and driving east. Ah, you didn't know about the Atlantic . . . . Many businesses never get to where they want to go either.
If you decide to go on holiday, you will have to decide where you want to go. You then decide what method of transportation to use and then how to go. Sometimes you won't be able to go where you've decided because it takes too long, it's too expensive or because of other restrictions. You then decide to go somewhere else. The success rate for this kind of project is quite high.
The small business without a plan doesn't know where it's going. The owner makes decisions based on his view of things as they happen. Where he ends up depends on what happens to him rather than on what he wants. He can easily end up in a situation where, no matter what he decides, he will lose his business. The success rate is low.
In the previous article, we looked at a tool called the work breakdown structure. If you know where you want your business to be in five years, you can set goals for each year, take the first year and break down the work into jobs that have to be done to achieve that goal. Each job can be broken down into individual tasks which have to be carried out to complete the job. Each task can then be tracked by the day, by the hour and by the minute.
Congratulations: you've made planning a full-time occupation and can become a planning consultant.
Seriously, to be successful with your business, you need to have goals in terms of sales, gross and net profit and a detailed cash flow. These parameters have to be supported by reasonable assumptions regarding cost of production, cost of sales and other expenses. Here is a link to a site with more information and two sample business plans. Set yourself some goals and have fun planning. The first thing you'll find out is whether you can get there from here. Next you'll be able to track progress. Finally, you'll know when you've arrived. And the bank manager will be grateful.
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