Planning is essential when starting a business. To paraphrase Benjamin Franklin, failing to plan means you are planning to fail. The failure rate of startups in 2019 was 90%. Since then, this percentage has likely increased, thanks to the difficulties caused by Covid.
Fortunately, there are many tools entrepreneurs can use to put in place adequate plans, such as business plan templates and a flow chart maker to simplify workflows and routines. And the usefulness of such tools doesn’t stop there. Proper planning is essential when the time comes to expand the business.
Read on to learn more about the importance of planning and how you can use it to ensure the survival and prosperity of your business.
To be a successful business owner, you need clear and actionable goals in place. It’s not enough to have a vague idea that you want to “make lots of money”. If you don’t have specific goals, how can you direct the business or ensure employees are all on the same page?
Whether a startup has two or 20 employees, planning is essential when you are trying to identify your goals and objectives. Plan your strategies and how you expect to achieve your objectives. Communicate these objectives with the team working for you, so they have a better understanding of what they are working towards.
Running a business involves many tasks. From managing the finances, admin, and marketing to dealing with clients and products – it’s easy to end up focusing on the wrong areas to the detriment of the business.
Adequate planning of business workflows can help a business achieve greater efficiency, which will have a positive impact on the bottom line. Use planning tools to help you identify which processes are most important. You can then allocate resources more effectively, so employees don’t end up wasting time on less important tasks.
For example, using a workflow planning tool to analyze production processes might reveal that you need more people in picking and packing, as slow dispatch is hurting your customer relationships.
It isn’t always easy to spot when extra resources are needed in certain areas of a business. As highlighted above, failing to spot inefficiencies in the workflow can be highly detrimental to the business’s productivity.
Asking too much of employees by expecting them to juggle multiple tasks is a recipe for disaster. Before long, you will end up with unhappy customers and employees on the brink of burnout. This is no way to run a successful – and profitable – business!
Use planning tools to help you figure out where resources can be best allocated. This ensures individuals work on the tasks best suited to their talents, and you don’t end up with a shortfall of labor in key areas.
Managing risk is a critical part of running a business. It helps you plan for times of uncertainty, or even outright disaster.
The Covid-19 pandemic is a good example of a situation nobody could have predicted in 2019, yet by March 2020, it was clear hard times were here to stay. Many small and large businesses closed their doors during the various lockdowns, and many more continue to struggle. While risk management probably wouldn’t have saved a lot of these businesses, it might have helped a few survive the storm.
Every startup, no matter what sector they operate in, needs to have plans in place to help mitigate difficult circumstances. Have a plan for everything, from an economic downturn and supply chain issues to a loss of raw materials for your products or a labor shortage. Think of ways to handle every scenario, such as investing in specialist insurance, so the business can continue to trade. One day, this attention to detail might be enough to keep the business afloat.
Growing the Business
There will come a time when you feel it’s time for your startup to expand. Planning can help you identify when the time is right.
Use planning to help you identify the weaknesses of your operation, as well as its strengths. This ensures you won’t attempt to grow the business before you have the right foundations in place.
One day, you will be ready to hand over the reins of the business and enjoy a well-earned retirement. How you handle that all comes down to succession planning. Decide what you hope to do with the business, whether you plan to sell up or hand over control to a family member. With the right succession plan in place, the transition should be relatively seamless.
Never underestimate the importance of adequate planning. It might make the difference between a successful startup and a complete failure.