Many businesses fail because of lack of planning.

Strategic planning is a crucial first step in business development and if excluded can be detrimental to the business. The planning stage is similar to the foundation needed for constructing a building. It is impossible to construct any type of building without laying the foundation, a good analogy of why it is equally important to plan for business success.

As time progresses, the foundation of a building becomes weaker and will ultimately have to be repaired or replaced for the continued support of its structure. Similarly, as the business expands and the market changes, the business plan should be revamped to sustain the operation of the business.

The best approach to planning is to create a written document which will serve as a guide and a means of monitoring the business. In creating this plan, it is imperative to consider various factors such as the business model, the target market, and the most suitable location. Also consider how to market the products or services and create brand loyalty, how much capital is needed and the source of funding, scale of operation, number of employees, location of suppliers, and legal requirements or regulations. Keep in mind this is not an exhaustive list. It’s dependent on the nature of the business and there may be other variables. Contingency planning is also paramount and the plan should address potential challenges and how to resolve them.

Of course many businesses exist without having these formalities, but it is never too late to strengthen the foundation of the business or to implement completely new processes. With proper change management, the necessary changes can still be made to reposition the business and gain a competitive advantage. A unique competitive advantage is the differentiating factor which is most impactful and will resonate with customers to increase market share.

An interesting and controversial aspect of planning is deciding the right time to take the leap into the world of entrepreneurship. The popular view highlights the difficulty of committing the time needed to grow a business while working full time. The opposing view supports the choice to build the business concurrently with a full-time job.

These two approaches have their own merits and planning your time and resources can make all the difference. If there are enough financial resources and capacity to delve full fledged into being an entrepreneur, then this could be a viable option. But if the need for a stable income is essential in the early stages of the business, then it is probably a better idea to gradually build the business before foregoing income stability. Adopt effective planning strategies and make good decisions for propelling long-term success.

Featured Image: A business plan is a document that guides and monitors the business. | Pixabay