In this blog I want to explain how having a comprehensive business plan can help business owners once the glitter has worn off and the business has become a reality, complete with all is beauty and ugliness, dimples and warts, trials and rewards.
Too many people start out without a plan and, when times get tough (as it with certainty will), many of these people simply get going, leaving their dreams, efforts and money strewn on the floor or, more likely, in the hands of false friends whose only wish was to separate them from their money, and damn the dreams.
With a business plan which truly reflects your dream and how you originally planned to bring it into the light, you have a map on which you can:
- Ensure your dream and purpose reflect your initial criteria in the business world of “noise” and interference;
- Measure your purpose against actuality and identify where you have misjudged your strengths, weaknesses, opportunities and threats;
- Adjust your plan, purpose and dream to ensure you are best equipped to face each new situation and before the situation rips them from your control and forces you to follow, rather than lead, your business into the night and through those dark times; and
- Choose the best way forward through the dark times of struggle and threat back into the light of growth and success.
Your business plan must be the tool guiding you to stay on the high road. There will be times when you doubt yourself, your business, your co-workers, and your future. In those dark times it is always easier if you have an emotional anchor on which you can rely for guidance and support. This anchor should be your business plan.
I recommend that you keep your business plan handy at all times. At least quarterly (or more regularly when times are tough) you should compare the projections you made in the original plan with the real situation. By doing this you will be able to:
- Anticipate problems and challenges and prepare to address and avoid/resolve them; and
- Adjust your projections in line with the changes that have occurred in reality.
One example to show where this form of management was successful occurred some years ago in South Africa, where a large company decided to enter the glass bottle business. Their initial planning determined a need for three refractories producing bottles to be built on three different sites around the country and the most appropriate time frame was that each would be separated by a period of three years.
In reality, the market off take was double their projected size . Within 18 months of commissioning the first refractory was operating at 100% of capacity and the demand remained very strong. The nett result was that the overall plan had to be accelerated, with commensurate increase in pressure on cash flow and management capabilities. Eventually the project was condensed form 9 t 5 years, by which time all three operations were commissioned and operating successfully.
Fortunately it was possible for the company to meet these challenges. By being aware of the situation the necessary funding was secured to meet the additional cash flow demand. Without this early warning and with some astute and courageous mangement a potential disaster from an overloaded cash flow demand was avoided and the opportunity successfully idetntified and developed.
For this reason I strongly recommend that a formal, written business plan should be part of all management tool kits and it should always be available and used to measure progress in business life.
Have fun, do good and contribute to your society as best you can. Always remember that you reap from what you have sown.