The Dangers In Not Making A Business Plan

Failure of an operator to put the time, research, thought and energy into formatting a business plan is almost guaranteeing that the operator‟s business will fail. The Perils A business plan is crucial to operating successfully. Without a business plan any operation is akin to a ship in the ocean without a rudder. Business must have a business plan which plans for success. This planning needs to include market research and the identity of the primary consumer. Businesses must develop a five or ten year plan that includes cash flow, finances and expansion. Statistics are stacked against new businesses succeeding. Research indicates that in the United States businesses with fewer than twenty employees have only a 37% chance of surviving four years and only a 9% chance of surviving ten. Restaurants fare even more badly and have only a 20% chance of surviving two years. Of these failed businesses only ten percent closed involuntary due to bankruptcy and the remaining 90% closed because the business was not successful, did not provide the level of income desired or was too much work their efforts. The old adage “People don‟t plan to fail they fail to Plan” cannot be more true when it comes to business. All businesses should have a clear plan for success which involves actions if things should go wrong. Whilst it is understood that no magic solutions guarantee a business will succeed there are three factors which are linked with success. A business plan has to be formatted. Financial information needs to be known about the business and there must be an accurate profile of the target market of the business.