Blog Post - Stephen Wicks
There is a well known statistic that states that 8 out of 10 businesses that start will eventually fail.
Wow. That's a large number. There are many reasons why a business may fail but one of the main reasons could be a business owner's lack of planning.
In business there is no way for you to know what may happen from one day to the next. Perhaps your customers will find other business to fulfill their needs, or maybe a natural disaster will occur and destroy some of your property, records, or client base. Who knows? Anything could happen right? But that's where planning comes into the picture. You can not only plan for things that you want to go right, you can also plan for when things go wrong.
A proper business plan will also keep a business owner on track with their goals. Unfortunately, it's very easy to get side-tracked and go into an area of business that was not planned for previously. Making a pivot in business is fine, but wild, uncontrolled swings in business objectives could cause confusion for you, your employees, and also your customers. If you don't know where you're going, no one will want to follow you into the unknown.
Even though, it's widely accepted that business owners should have a business plan, there are some "new school" entrepreneurs who say that they start businesses and never have a business plan. There are some well known success stories of people who just had an idea and hit the ground running without a plan. I'm sure that may have worked for them, but I don't think that the majority of us should put our resources and livelihood on the line on a whim. Resources and funding can be hard to come by, especially for minority business owners. Make sure that if you're gambling on other people's money that you are doing so wisely and cautiously.
Competitors can come snooping for your customers!
As an entrepreneur you should also be aware of your market. You should know if there are other businesses that are similar to yours. They may be trying to steal your customers from you.
Good customers are hard to find and they may feel like they can lure your customers away instead of finding their own. How will you address sudden new players in the market?
Remember how badly Blockbuster Video dealt with the threat from Netflix and Redbox? At one point Blockbuster had over 50,000 U.S. employees and over 9,000 retail locations. Now, they only have 1 retail location in the United States. They fell from being one of the largest U.S. businesses to one of the smallest in just 14 short years. The leadership of Blockbuster Video obviously didn't have a plan in place for observing the competition and keeping up with the needs of their customers.
My advice? Don't fall victim to poor planning. Research the internet for business plans and find knowledgeable people in your community that can help you grow your small business the right way.
Remember the old adage, "failing to plan, means planning to fail."
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