Today, if an entrepreneur is going to succeed in business, he must have some plans and put them in the right place from the very beginning, since the plan becomes the background upon which to be the base for his business. If you fail to make plan invariably, it means that your plan is fail. This is similar to success would not come when there are no laid down charts as to what should be finished, which way to do it, what time to do it and what is the right place to start it.
It is always necessary to plan as it makes one have a focus as to what are needed to run the business – the man power, capital, raw materials, means of promoting the business, expansion, development, research, alternative sources of revenue and what to do in case of failure.
It is important to determine the number of personnel needed for the business so as to know how much would be needed to pay their salaries and avoid the issues of owing backlog of salaries. Your business could be crippled very fast if you start owing staff salaries so early.
You also need to plan what your capital can take; there should be priority and opportunity cost. If your available capital cannot take care of everything you intend to do, it becomes necessary to plan in order to know what to shed and what has to be handled first.
It is also important to know where to get an alternative source of capital for expansion should you run out of capital. If this is not planned from the beginning, the business is likely to get to the point where going forward might be difficult. It is likely to collapse if help does not come immediately: it is therefore important to plan for the raining day.
It is also important to think of a means of promoting the business – what kind of advertisement would be adopted (offline or online)? How much would be available for advertisement? This would enable you know the strategies to adopt in terms of promotion. It would determine whether you go for the relatively cheap but less effective method, or for the expensive and very effective method.
Planning would also enable you know how soon to expand and what it would take to do so. It would help you know how much you need to save monthly in order to meet your expansion target within a specified period of time.
It also enables you know what exactly to do in case your business fails or when your alternative sources fail to provide the needed succour. This means you should have a ‘plan B’ in case the ‘plan A’ fails. Having such alternatives reduces shock in time of failure.
Joseph Ezie Efoghor is a small business manager. He has helped several people revive their dying small businesses. For more of his articles visit http://smallbiztricks.blogspot.com