Business Planning: What Goes Wrong and How to Plan An Effective Business Plan
The first rule for everyone in business, or going into business, is that a business plan is essential. Essential to get started, from validating your idea through to accessing funding, the business plan is the fundamental building block of any business.
So why do so many people struggle to write effective business plans which they should be using as the corner stone of their business? Why do so many business owners rely upon key ideas held in their head and winging it, even with some of their biggest decisions? And why do so few business owners trust, use and live their business plans?
Now these are all fair questions which individually leave business plans and business planning not valued outside those essential, must do to get started roles. For many, that experience is exactly why business plans and business planning gets such a bad press by business owners once they get past the start line.
What Goes Wrong
Fundamentally business planning has become a tool to get funding, not as your manual to drive your business. This bad habit, of building a business plan just to get past go, has resulted in huge effort to start on the right foot, but is not valued in keeping on the right track.
The second major factor with business planning is that business owners often plan the wrong things. Writing a business plan is seen as "filling in the template" following the process and jamming words into format. They focus on producing financial figures which add-up, not on identifying the important factors which drive business success, such as developing and validating the right business model, or identifying real future growth opportunities and how the business is going to succeed in that market.
A third major factor is that business planning often lacks solid forward information, too often relying upon historical data, the accountants view of what has happened, rather than looking forward to where markets are going. You can see this in many businesses whose business plan over focuses on turnover and cost management, rather than describing their model, their market opportunity, how they are going to enter the market successfully and therefore who their target audience is and why.
Successful Business Owners Use Tools To Plan Successfully
Business owners do not live their plan because they simply don't believe in them, despite the fact they wrote it, or heavily influenced its writing. Owners need to use business planning tools to develop their business model effectively, creating solid foundations. There are a host a tried and tested business planning tools to help business owners effectively research their plan. using these business planning tools provides real evidence that underpins a good business plan.
Possibly the most important difference between businesses which succeed and exceed expectations and those which do not fulfill anything like their full potential is often the lack of solid foundations within their plan. A lack of research regarding their market, its nature and future, undermines confidence and knowledge of who the customer is and why they should buy your product or service.
Business owners over focus on the product or service not on the market, the target customer or market entry. What business planners need to focus on is quantifying and qualifying their market knowledge using business planning tools, to enable them to know what to put into their business plan, that provides the right evidence adds weight to your argument and provides a rationale behind the assumptions you make.
Successful Business Owners Benefit From Using Business Planning Tools
The right business planning tools, used in the right order will provide business owners with the tools and the processes to go through to build an effective business plan, which is both reliable and robust, a solid base for making informed decisions about your business plan.
Using the right business planning tools, to research and inform your business plan, also provides confidence to business owners and senior management to trust your business plan. If you trust your business plan you are more likely to deliver it.
Using the right evidence, the right analysis and logical conclusions then business plans built upon effective use of logical step-by-step business planning tools provide business owners with a clear and robust plan with clear focus for their efforts. Using business planning tools makes business planning a value-added process built upon solid foundations, with clear insights about what's driving the market and why your business will be successful.
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Here's some other thoughts about why you should be using Business Planning Tools to build your business plan on solid foundations why to use Business Planning Tools to build your business plan.
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Cowden Consulting is a strategic planning and implementation business which works with business owners to grow and develop their business, with the tools to successfully build business plans, contact us to learn more: click herehttp://www.cowdenconsulting.co.uk.