The Critical Importance of a Business Plan

January 9, 2017

Business plans are critically important to the success of any and all businesses NOT DESPITE THE FACT that they will need to be repeatedly or continuously reviewed and rewritten, BUT BECAUSE THEY WILL be repeatedly and continuously reviewed and rewritten, keeping the underlying business subject to examination and inquiry.

I have been working on a business plan over the past couple of weeks, and I am fully capable of producing a comprehensive business plan myself or with the help of others. A comprehensive plan includes a textual description of the business and plans for it over the next year and thereafter, as well as five-year projections of revenues, expenses, earnings and the like. A comprehensive business plan includes all of the bells and whistles.

As I am writing and editing this business plan, I am relatively certain that none of what is projected will unfold exactly as expected. Even in the first month of the plan, January 2017, the underlying business will surely not perform precisely as projected.

So, one might ask, if the underlying business won’t perform as planned and projected in the business plan document–even in the very first month (not to mention the sixtieth month)–what is the point of the business plan?

In writing and editing the business plan, all of my thoughts regarding the underlying business, as well as the thoughts of others who are helping with the plan, are carefully detailed.

As the business launches into the new year, its performance can be monitored and compared each month to the performance as planned and projected.

Each year, the business plan will be reviewed and revised, as it is a fluid document reflecting a fluid business. As part of the annual review and revision process, every assumption and plan and projection regarding the underlying business will be carefully revisited.

It is this process of planning that is so critical to every successful business. The business plan is merely a tool for enabling, facilitating, in some cases requiring this review process.

So, when you get started with your business plan, keep in mind that the plan and the related planning process are of critical importance not despite the fact that it will be repeatedly and continuously revised, but because it will be.

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