Has this ever happened to you? You get in the car, begin your journey and realize you have no idea where you’re headed or how to reach your destination. So what do you do? For some, they keep on driving, assuming they’ll figure it out along the way. For others, they pull out a map or plug their destination into their smart phone and let GPS take it from there. Then, if they still need help, they stop and ask for directions.
The same scenario can apply to starting your business and mapping out where you’ll go in the future. Some people start a business with no clear end in sight or no true direction or course. While this “fly by the seat of your pants” approach can be fun and exhilarating, we’re here to tell you it’s not the ideal way to start and run a business (sorry to rain on your parade).
Rather a business should model itself after the latter group in the above example. By pulling out a map or plugging in your end destination, you can plan a trip that will get you to the place you want to go. Hopefully, it may even get you there in record time.
This is the heart of business planning, an essential function of running a business. Consider your business plan a roadmap or GPS for your organization. It’s an important step, because it keeps you on track during the early years of your business and gives you a defined destination to reach, as well as keeping you on track along the way. A business plan generally includes:
- Company description (What is it exactly that you do? What sets you apart? Who do you serve?)
- Organization (we’re talking the structure of your business and what management looks like)
- Service/product line (What are you selling? How does it benefit a potential customer?)
- Marketing and sales (How will you sell your product? How will people hear about you?)
- Funding (How are you going to get started? Are you asking for funding?)
- Financial projections (How are you going to make money?)
- Projections for 3-5 years ahead
- Yearly milestones (and how you’ll get there)
- Revenue projections
So now you have your destination. You’re trucking along, enjoying the scenery and gaining momentum. But wait … you’re lost again. Your GPS told you were coming up on a national park and instead, you’re in the Walmart parking lot. Now what?
ASK FOR DIRECTIONS. A business plan is a really great map for your organization and an excellent exercise in understanding not only why you got into business the first place, but where you want to go and eventually end up. However, it’s not a concrete plan and sometimes, you encounter unexpected obstacles (hey, if you could see into the future and predict with 100% accuracy, you’d be a pretty wealthy business owner). So don’t be afraid to stop and ask for directions or help along the way.
Here a few common questions to ask along your business journey:
- What would have to occur over the next three to five years for your business to be where you want it to be?
- What are your profit and growth plans? How have they changed since you started this journey?
- How much longer do you want to work in the business?
- How quickly can you make effective decisions? Do you even have the information you need to make these decisions?
- How do you stack up against your competition? (benchmarking anyone?)
- Do you still have a clear vision/mission for your organization?
Take a step back every once in a while and reassess where you’re going and if your original destination is till where you want to be headed. If not, there’s always time to readjust.
Further, enjoy the journey. What you’re doing is pretty cool, and we want to see it succeed, grow and thrive.
Too wordy for your taste? Check out this infographic: