Think about the first time you had to use your credit to make a large purchase…like a car or house. If you knew all 3 of your credit scores prior to the application process, consider yourself an outlier, because I’m pretty sure the first time I checked my scores was much like a roll of the dice lol. And if you happen to also fall in that category, don’t feel bad because the learning has to begin at some point or another. Maybe that day is today.
Now this might seem like a stretch, but I’ve come to view business plans in the same light. The Type A personality in us can often be very results-driven and ready to dive into testing the validity of the business idea in real-time, however the real-ity of the situation is that we have to survive and thrive year after year. According to the Bureau of Labor Statistics, 20% of small businesses fail within their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years. And finally, 30% of small-business owners will survive their 10th year in business. Then the question becomes “Why do most small businesses fail?” Investopedia cites the four most common reasons why small businesses fail as 1) lack of sufficient capital, 2) poor management, 3) inadequate business planning, and 4) projecting unrealistic marketing budgets.
The purpose of this piece is to further illustrate and drive home the point that as small-business owners, we must remain extremely proactive in giving our businesses the best shot at having maximum impact. Scholarly discussions aside, I’ll briefly elaborate on a few practical reasons.
The routine exercise of planning will help keep your vision grounded.
A business plan serves many purposes, but one of it’s most powerful functions is that it serves as a management tool that can be referred to regularly to ensure the business is on course with meeting goals, sales targets or operational milestones. Just as the earth’s seasons change over the course of the year, so will the course of your business’ performance. And as your course meanders, it can bring much peace to know you can always break out your business plan and adjust the “sails” accordingly.
It will subconsciously serve as a guide as you make decisions throughout the year.
In the absence of sound logic, emotions have a sneaky way of influencing the decision-making process. Sometimes it works out great, but at the macro level when the hearts and brains of your operation are locked in a tug-of-war, the various components of a business plan (i.e., the mission statement, market data, sales projections, budget, etc.) are all of the logic you need to tip the scales and allow you to make informed decisions. A little peace of mind can go a long way. Trust me.
It can actually be fun.
Imagine if you could build a bridge to the life you envision when you daydream? To a degree, you actually can. In a business sense, we start out with goals, and the process of planning is akin to building your bridges. Now whether you’re hell bent on leaving a 9-to-5 job that doesn’t harness your potential or you simply are motivated by achievement…always remember to seek out the fun in the process because it keeps things interesting. And where there’s interest…excitement can be found in the vicinity.
With that said, I’ll sign off from here. We’re constantly doing small business consultations for everything from digital strategy to credit building to complete brand refreshes, so if you’d like to discuss leveling up your operation, please contact us and let’s continue this conversation.