Planning for Your Business
"If you fail to plan, you are planning to fail!" Benjamin Franklin
Have a "Business Plan" to pushing for success; a "Business Exit Plan" plan for what's next and be ready for the worst; and a "Continuity of Operations Plan (COOP)" to be prepared to overcome anything.
You don't need everything in place on day one. As Voltaire made famous in 1740 "Don't let better [or perfect] be the enemy of good" meaning don't put off starting something because you are forever refining the plan. That being said operating without a plan at all means you have no focus; you likely will not be able to manage your time effectively; you my not be seeing the big picture; and are almost certainly missing the little details. Because of these things you'll end up overlooking opportunities and being vulnerable to risks that are often the difference between success and failure.
If you have a relatively new business you can use a "Startup Plan", which is a simplified version of a business plan. You will need a full “Business Plan” if you are trying to attract investors or get a loan, or six months or so into your business once you regain your focus and figure out the basics. A "Business Exit Plan" is not needed until your business becomes profitable, and is especially important if you and your family rely on the business for income. The "Continuity of Operations Plan (COOP)" is important once your business becomes complex, has numerous employees, has high liability, large amounts of sensitive information, difficult to replace equipment, or difficult to replace personnel.
Startup Plan: Is a simplified version of a business plan with no specific structure and should be as simple or complex as needed, but should typically incorporating the following:
Set Strategy: Defined as a plan established to achieve long-term goals by focusing limited resources for their most efficient and effective use.
Honest evaluation of the competitive environment
Honest competitive review of your products, services, and pricing
To Do List & Timeline: List of all the thing you need to do to get your business started (year 1+) and a timeline of when they need to be done
Financial forecast: All recurring and nonrecurring income and expenses
Business Plan: Your business plan should plan for growth and success under normal conditions. Incorporating:
Mission, Vision, and Values Statements
The why, how, and what of your business
SWOT Analysis of Team Structure, Business Structure, and Corporate Structure
GROW Goals / Business Strategy, SMART Objectives / Market Tactics, and Metrics
Industry Benchmarking and Porter’s Analysis
PEST external threat analysis for long term business outlook
Financial forecasts under expected conditions
Business Exit Plan
You can’t live forever, so what are you going to do with the business.
Your business only ends four ways:
Dissolution (normally because of a failure to plan)
Bankruptcy (normally because of bad planning)
Sell (should be planned in from the start)
Pass on to heirs (can create family and financial problems if not planned)
Determine Business Value (book, sale, insurance value)
Identify possible buyers (specific if know, general if necessary)
Buy-sell Agreement and Insurance: Pays to buy your business on behalf of your heirs, a trust, or a third party when you die or become incapacitated.
NOTE: Having to quickly find a buyer and sell under pressure could minimize your opportunity for profit.
NOTE: An abrupt loss in your leadership of the company if you die or become injured will likely have a significant impact on its operation, revenue and value. This could leave you business unmarketable.
Continuity of Operations Plan (COOP)
Ensuring the continuous performance of essential functions/operations during an emergency
Identify critical assets, equipment, infrastructure, information, personnel, potential legal liabilities, and insider threats (fraud, theft, or embezzlement)
Identify types of threats, time frame, immediate needs, control requirements, emergency requirements, and follow-on requirements
Key employees: Long term absence of owner or key employee