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No matter how good your business idea is, your analysis of the overall market situation may convince you that you can't profitably exploit your idea right now. There may be financial limitations, imposing competitors, or other factors that simply make it not worth your while to pursue your idea, however good. If you followed our advice and documented your decision making process, you'll have created most of a business plan anyway. The exercise will obviously have been well worth it.
The more likely outcome of your planning, however, is a business plan that you intend to use as you begin or continue to conduct business. You should expect to derive substantial benefits in exchange for the time and energy you expended on your written plan. And, you will have a document that you can use to communicate with both internal and external audiences.
Most important, however, you will have established a documented planning process that you can use over and over again, improving it each time by incorporating the experience you have gained. The existence of the document and the process enable you to derive the maximum benefit from the work you put into creating the plan. The benefits include:
- having an action document for your business. The plan can serve as a blueprint to help you manage your operations. This type of management tool is invaluable to keeping focused on your goals and to evaluating alternatives.
- forming the basis of a tracking and evaluation tool. Because your plan will set forth a timetable of operational and financial milestones, you can meaningfully interpret your actual operating results against the baseline established by the plan.
So, how do you go about getting these benefits? Focus on the plan as a monitoring tool (or the basis for one). Make sure you have systems in place to gather the information you need to assess how your business is doing. Make sure those systems can provide the information to you in time for it to help. And, make sure that the information you gathered is the right information.
A whole new field of specialists (business information specialists, etc.) has evolved to make sure that business owners get the information that they need when they need it. As a small business owner, you'll probably be the information specialist as well. Just another back office responsibility. Let's look at how you can effectively use your business plan to run your business.
- monitoring your progress
- when things go according to plan
- when things go better than planned
- when things go wrong
- keeping your plan current