Failing to Plan is a Plan for Failure
Looking at figures released by the US Small Business Association in 2011, it is interesting to note that according to its surveys, 30% of small businesses will not survive their first two years in business. Even more alarming is that only 50% will make it past the five-year mark! These statistics look much better than other (unsubstantiated) ones that have been circulating in recent years, but it is still disturbingly high.
The main reasons cited for failure include:
- Starting for the wrong reasons – business owners who lack traits such as passion, health, tenacity, drive, independence and integrity will have a tough time.
- Poor management and execution – those who do not implement plans effectively and efficiently are at risk.
- Lack of capital or funds – it usually costs more than anticipated to start a new venture, so keeping a keen eye on the finances is critical.
- Lack of planning – while there are no reliable figures available, it is estimated that up to 90% of small business owners do not have a business plan in place, or those that do have a plan, are not following it.
- Not knowing the market – being in the wrong location, being inaccessible or entering a market that is not viable, big enough or sufficiently defined, are all significant risk factors.
- Over expansion – businesses that grow and spend too quickly without proper plans, resources or funds will find it difficult to survive in tough times.
- All these reasons point to one much bigger problem – LACK OF PROPER BUSINESS PLANNING – hence my belief that a failure in planning is definitely a plan for failure.
Business planning does not have to be a mysterious or protracted activity. Unfortunately, the array of resources and advice often creates confusion. Not surprisingly, business owners and entrepreneurs generally believe that this activity is highly complicated, or only really required if you want investors or funding.
In reality, however, a more sensible option is to focus on a thorough planning process, as this is far more important than merely having a plan in place! This planning process would entail examining all aspects of the target market, the competition, business opportunity, the products and services, the value proposition, as well as go-to-market and marketing plans, and then linking these to financial outcomes over a period in time.
No need to over-complciate matters, but you ALWAYS need to be clear on WHY you are in buisness, WHAT you offer and WHO you serve, HOW you are different from the competition, WHAT you are doing to get clients and customers and HOW MUCH this is going to add to your business bank account.
Your professional challenge: Do you have a business plan in place? Take a step by step methodical approach to review the following aspects of your business: your target market, the competition, your product, service offerings, business operations, marketing and finances. Next it’s time to get serious about your business success by putting your plans on paper and commit to meeting your milestones! Ask us how if you are having difficulties!
|Article supplied by: Gina Mostert, Business Strategist, Consultant & Coach
About the Author: Gina works executives, business leaders and companies in the services sector, helping them to think, plan and lead more strategically.