In the book E-Myth they identify the #1 cause of business failure…..lack of planning. When you think about it, when you don’t know where you’re going, any road will get you there. Gut feel and intuition will only get you so far.
The same principle applies to business. Your likelihood of success dramatically improves with some type of roadmap that outlines the places, things and financial resources you need along the way. Who in their right mind would head out for a trip to Florida and just head south? Maybe some people. Maybe the ones that don’t have any time pressure or need to get there in some type of cost effective manner. The ones using at least a map will likely get there a lot faster and safer.
The smart ones draft a small if not detailed plan on how they will get there. Their plan also accounts for contingencies. Even the best laid plans though, go awry. BUT, the people with a plan are more likely to still succeed or overcome the obstacles along the way. Everybody knows someone that just flies by the seat of their pants. It sounds fun, but when the rough water starts to blow who do you want at the helm of the ship? Captain Seat-of-the-Pants or Captain Kirk? I choose the latter.
There are three (3) types of plans every business will need at some point or another.
- Business Plan
- Marketing Plan
- Strategic Plan
For new businesses the first thing you need is a business plan. This is what outlines the general idea of a business and how it plans to make money. No business should be started without one because you’ll need this document to get funding from investors. More importantly, a written business plan helps synthesize your thinking about how your new business concept will be competitive.
The next type of plan you need is a marketing plan. A well prepared marketing plan will outline how the business will attract customers and maintain profitable relationships with them. If your business doesn’t have a marketing plan you’re likely operating tactically versus strategically and that’s a recipe for failure.
The last, and probably most important, type of plan for businesses that have been in existence for a few years is a strategic plan. A strategic plan is crucial for providing an existing business with a clear roadmap on how to get from where they are to where they want to get to. The underpinning of a strategic plan is a “gap analysis” which essentially outlines the critical things that need to change or be done in order for the business to achieve it’s long-term goals.
Below is a summary of the three types of plans and their key differences.
Having a well prepared plan can make the difference between success and failure. Contact us today about how we can help you plan for success.