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The Importance Of Business Planning
by Raven Esparot
http://www.ftbbusiness.com
Developing plans for your business is quite a serious
undertaking. Many small business owners either lack the
skill to plan the future of their business or they are too
busy with the battles and the fires they are working on
today, to even begin thinking about planning. For a while
during the technology boom, the corporate plan was founded
on the principle " Build it and they will come" and " the
old business models just don't work anymore". In fact if
you uttered the words business case or business plan during
that time frame, you were labelled a dinosaur and shuffled
off to some backwater if you were lucky. Many business
planners were fired.
Post the technology boom business has now re-adopted
belief in business planning. Companies now want to develop
a strategic plan and implementation plans to achieve new
business goals. Companies now want to develop solid
business cases with financial data that supports efforts
to seek a loan from the bank. Once the business plan
has been developed ti can be re-worked over and over
again as the business changes.
A business plan contains a description of the product
or service that the business is selling in order to
make money. The Plan also outlines how the product
will be marketed and sold to customers and defines who
those customers are. The plan will include some financial
data including a sales forecast and revenue projections
based on the items you will be selling.
Estimating the costs of the business is critical as it
allows you to make decisions about how the business will
operate from week to week. It can also impact on your
business long term, particularly if you are too optimistic
about revenue and not honest enough about expenses. But
this is human nature and you need to be careful that you
don't fall into that trap, but rather are brutally honest
about the position. You can use a host of tools in order
to ensure that these figures are accurate with ranges in
place such as worst case and best case scenarios. This
helps you to determine which variables will have the biggest
impact on the business.
If you are starting up a new business you need to remember
to focus on getting the products, marketing, delivery and
support in the right format under the umbrella of your
business plan and business goals so that you can monitor
them on a monthly basis.
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