Why Planning is Important for Business Startups
Posted: Saturday, October 09, 2010
by efoghorjos
jossyhealth
Any entrepreneur that intends to succeed in business must put some plans in place right from the very beginning, since planning is the foundation upon which to build the business. Failing to plan invariably means planning to fail, as success would not come when there are no laid down charts as to what should be done, how to do it, when to do it and where to start from.
It is important to determine the number of personnel needed for the business so as to know how much would be needed to pay their salaries and avoid the issues of owing backlog of salaries. Your business could be crippled very fast if you start owing staff salaries so early.
You also need to plan what your capital can take; there should be priority and opportunity cost. If your available capital cannot take care of everything you intend to do, it becomes necessary to plan in order to know what to shed and what has to be handled first.
It is also important to know where to get an alternative source of capital for expansion should you run out of capital. If this is not planned from the beginning, the business is likely to get to the point where going forward might be difficult. It is likely to collapse if help does not come immediately: it is therefore important to plan for the raining day.
It is also important to think of a means of promoting the business what kind of advertisement would be adopted (offline or online)? How much would be available for advertisement? This would enable you know the strategies to adopt in terms of promotion. It would determine whether you go for the relatively cheap but less effective method, or for the expensive and very effective method.
Planning would also enable you know how soon to expand and what it would take to do so. It would help you know how much you need to save monthly in order to meet your expansion target within a specified period of time.
It also enables you know what exactly to do in case your business fails or when your alternative sources fail to provide the needed succour. This means you should have a plan B' in case the plan A' fails. Having such alternatives reduces shock in time of failure.
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Top-level comments on this article: (1 total)I agree that planning is vital, and from my own experience I know that if you can't plan effectively, you don't truly know what direction you really want to go in, or you don't really understand the business you want to do.
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