You’ve heard the old saying, “If you fail to plan, you plan to fail.” But, if you do plan, then you can make sure your business will succeed.
When it comes to writing a business plan, most entrepreneurs struggle to put down the essence of their company on paper. This can become a huge problem, especially as the business grows and requires a plan that reflects the changing landscape.
As an entrepreneur, you probably already use planning to ensure that your business is on the right path to success. The business plan is something that has a really powerful business potential energy stored in it. It is your roadmap to success.
However, at the same time, wrong assumptions and predictions that are possible in the planning process can become harmful to your business.
Many business owners have a plan in place for their company’s growth—and they think they’ve got it all covered. But when the time comes to execute their plans, it turns out there are many elements that need to be adjusted first.
But, why do I need to adjust my business plan?
The question “Why do my business plans need to be adjusted?” is one that I hear regularly. And when someone asks that question, it often leads to a conversation about the nature of “business planning” itself.
When you think about a plan, you probably think about it as being a one-size-fits-all document. You know the basic format: you write your business idea, your goal, the market, the business strategy, and so on. But it is really important to realize that there are several major points that your business plan may need to be adjusted for in order to better meet the needs of your specific business model.
The goal of your business plan is to guide the direction of a business – but a great business plan will not just sit there on the shelf collecting dust. In fact, a poorly written plan can be detrimental to the growth of a business. Many entrepreneurs think that a well-written plan will make the difference between success and failure, but this is not always true. There are numerous reasons why a business plan needs to be adjusted, and the goal of this post is to provide some insight into what those are.
Reason #1: What You Have Planned and What Happens in Reality Will Always be Different
Are you an entrepreneur who experienced cases where everything that you put on paper based on assumptions and predictions of the future becomes reality?
Are you an entrepreneur who always has enough money required for future business operations as planned? If you are a small business entrepreneur, the answers to these questions will probably be “no”.
Simply you don’t have enough resources to allow yourself to work on the implementation of your plan even if there are wrong assumptions.
Are the sales numbers, in reality, the same as planned in your business plan?
The likelihood that the answer to these questions will be yes is very low. As an entrepreneur, there is a probability that you will not be a rationale or real enough when you plan for your business. That means you can plan to spend $200.000,00. But, instead of that, you will really need to spend on the normal operations of your business $300.000.
Also, ye can predict your sales to be $800.000,00 based on your analysis and assumptions. But your sales will be only $600.000,00. What you will do now?
Because of that, you’ll need to increase or decrease your numbers in your plan as you go through the implementation. This will tell you to change some of your action steps.
#Reason 2: Prediction and Assumptions Inside Your Plan
Most of your company expectations will be based on predictions and assumptions about sales that your business will generate from the one side and costs that will be needed to support your business operations in the future from the other side.
From these numbers, you will make budgets for your marketing activities, sales initiatives, research, and development, etc. If you don’t achieve the same sales results as you have planned, you can not realize your planned activities. These activities are covered with your business plan and are based on the wrong assumptions. Your company will join a stagnation position. So, there will be a danger of losing customers and money that will not come into your business.
To ensure that everything will be alright you’ll simply need to multiply your initial planned cost by 1,2 to 1,5. Also, at the same time, you will need to divide your sales predictions from 1,2 to 1,5. After these steps, you’ll need to realign the rest of your plans that are based on these predictions. To create a valid business plan, you can visit BusinessPlanWritersUK.
📝 Further Reading