Seven Planning Tips for Entrepreneurs

By Randall Orser | Small Business

Every business owner knows that it’s important to engage in planning. However, not every entrepreneur knows how to begin doing so. Here are seven tips for effective business planning.

  1. Document your plans. The key points in your business plan must be written down and distributed to all relevant personnel. It’s not enough to hammer out an understanding among key staff at a meeting. If it is to serve as a blueprint for action, a business plan must exist in written form.
  1. Quantify your goals. Saying that you want to double your sales, year over year, seems clear enough. However, it’s useful to attach real numbers to that goal. Citing specific numbers forces you to do all the related calculating. If you’re going to double your sales, how many new staff will you need to hire in order to produce enough inventory? Will new warehouse space be necessary? Will you need to make new distribution arrangements?
  1. Create a schedule. This point is similar to the previous one. Vague ideas about the timing of important business events are not sufficient. A detailed schedule forces you to plan not only the significant business events (such as a product launch) but also all the tasks that lead to that event. For instance, a product launch involves not only developing the product but also setting a price point, creating the packaging, and developing a marketing campaign.
  1. Hire the people to support the achievement of your goals. Hiring typically takes months, from creating the job description through recruiting candidates, including doing interviews and checking references. If a business event that is happening three months from now will require extra personnel, you should start the hiring process today.
  1. Develop contingency plans. Rarely will everything go entirely according to plan. A key employee may leave. A quality assurance check may reveal a significant bug in a software product. A client may launch a lawsuit against your company. It’s necessary to have sufficient contingency planning in place so that one unexpected shock does not derail the entire business plan.
  1. Adopt scalable business functions to support the achievement of your goals. While you hope and expect to achieve whatever goals are specified in the business plan, experience indicates that the precise numbers may not be attained. Therefore it’s important that the functions involved with the production and delivery of your product or service be scalable. Outsourcing is one option that allows greater flexibility.
  1. Determine how to measure the success of your plan. Assuming that you may not achieve the precise numbers cited in the business plan, it’s necessary to determine whether your plan has been successful. This may sound obvious, but it is important. If your plan has been successful, then it makes sense to continue doing the same things. However, if the numbers indicate the failure of your plan, it may be necessary to develop a whole new strategy.

These key steps in business planning should never be omitted. If you don’t decide what your precise goals are and cite specific numbers, you may achieve limited success, but it will be difficult to sustain. Taking all the steps mentioned in these tips will ensure that you develop your business in a way that ensures long-term success.

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