Lack of Business Planning
Monday, February 15th, 2010
Beware the temptation to jump into business before youâve done the proper planning. And donât underestimate that temptation. Once you have made up your mind to start a business, it is difficult to wait to get going. You want to start moving, making money, living the life youâve dreamed of. But if you want your business to succeed, you must take the time to understand it, yourself, the industry, and the market.
It helps to consider how you would approach buying a house. Would you sign a check and move on in? Or would you research everything first to make sure you arenât getting a lemon? Treat starting your own business the same way. Don’t invest your time, money, energy, and dreams in a business you don’t understand inside and out. More businesses fail for want of proper planning than do for want of money.
Business plans are perfect for taking you from ignorance to understanding. In order to produce a good business plan, you must learn all the ins and outs of your proposed business. And the process of preparing the plan will teach you much of what you need to know in order to run that business.
The main reasons people skip business plans are often the same as the reasons people avoid accounting: 1) many people donât like to write and 2) the time it takes to prepare the plan takes away from the time to run the business. But those reasons â those excuses, really â are just as inapplicable here.
Just because you donât like doing something doesnât mean you donât have to do it. Running your own business will mean sacrifices. Luxuries like vacation time, sick days, salaries â these are the first things to go out the window (at least in the beginning). Taxes must be paid, shipments must go out, decisions must be made, invoices must be sent, and bills must be paid â whether you like it or not. Same with accounting. Same with planning. And, as with accounting, you can always hire someone to prepare your business plan for you.
The second reason people often skip the business plan stage is because they want to spend the time it would take to plan their business to be in business instead. They see the planning stage as taking time with no reward. But not only is that not true, it is also supremely short-sighted. It may be true that taking time upfront to plan your business will increase the time until you can start making money. But it will also likely increase the amount of money you can make. Writing a business plan allows you to explore your business before you start. It allows you to make your mistakes on paper rather than in the real world.
Write a business plan. Youâll be better for it. It will save you hassles and make you money in the long term. A good resource is my book âThe ABCâs of Writing Winning Business Plans.â This book can be purchased here: The ABCâs of Writing Winning Business Plans
What are some of the hassles you might be saved if you take the time to prepare a business plan? How about quitting your day job only to find your great idea won’t pay the mortgage? Or resorting to credit cards to finance the business? Many businesses fail within the first five years. Of those that fail, a staggering amount do not have business plans. An old carpentry adage says, “Measure twice; cut once.” Let your business plan be your measurement.
Garrett Sutton has over twenty-five years experience assisting and advising entrepreneurs, families and business in selecting the appropriate corporate structures to limit their liability, protect their assets and advance their personal and financial goals through real estate investments and other means of wealth creation.
To get a FREE copy of Garrett’s book, “What to Know Before you Incorporate” log onto http://www.corporatedirect.com
An author, speaker and a member of an elite group of “Rich Dad’s Advisors” hand selected by author Robert Kiyosaki, Garrett speaks to investors and entrepreneurs on a variety of topics including asset protection, liability limitation, wealth creation, as well as various business and real estate issues. Garrett has authored Own Your Own Corporation, The ABC’s of Writing Winning Business Plans, The ABC’s of Getting Out of Debt, How to Buy and/or Sell a Business, and co-authored Real Estate Loopholes. These titles are included in the “Rich Dad, Poor Dad” wealth building book series. Additionally, under the SuccessDNA Publishing label, Garrett has authored and co-authored numerous books including, How to Use Limited Liability Companies and Limited Partnerships and his latest title, INSIDER Secrets of Business & Personal Credit. Garrett’s books provide an accessible source of information for building your own success.
