The dream of their business is so vivid in their minds and the path to accomplish their goals is clearly in front of them, so why do so many business owners fail? Entrepreneurs often make the mistake of short-cutting the planning processes necessary for their business to overcome inevitable challenges and succeed.
When a business owner fails to plan, some nasty habits are either already ingrained or surface over time. These habits put their business at risk of failing.
Here’s how you can avoid three of the most deadly habits:
1: FANTASY MENTALITY
With an “if I build it they will come” fantasy mentality there is no plan to recover when the dream and belief aren’t followed by results. Before things start to fall apart, it may be time to consider a marketing strategy that includes a list of people or industries you expect to buy, where you’ll find them, why they will enjoy your product or service over others and what could keep them from making a decision to act immediately. Reviewing and updating this type of marketing plan regularly will keep your company customer focused with an eye on the competition and market conditions.
2: SHORT-SITED VISION
When a business owner’s investment of their time, talent and resources are completely focused on short-term projects and fulfilling immediate demands, their future is at risk. Planning “what’s next” and “what if” contingencies when the company is not in crises mode has a better chance of inspiring creative solutions and possibilities. Reviewing and updating this type of operations plan will surface strengths and weaknesses along with work delegation needs that are better addressed proactively instead of reacting to a problem.
3: UNDERESTIMATING
This isn’t just about how much money you have to spend or how much revenue you will generate. It’s about accuracy in estimating how much it will cost to produce a product and get it in the hands of your customer. It’s about what’s left on the bottom line of the ledger when all those expenses are subtracted from the beautiful top line revenue you generated. Completing a budget for every product is tedious but effective. Creating a template to be reused for budgeting multiple products will save time and may surface items not previously captured. Fourth quarter is the perfect time for a business owner to look at the current year’s performance and look ahead to projections for next year. If you haven’t completed a business plan before, now is a good time to consider planning your company’s future success. An online search for a business plan template will produce several options. Find the one that fits your unique style and personality. If you are considering a business loan in the coming years, a business plan is usually required by lenders.
If you find yourself procrastinating, connect with a mentor, let them know you are completing a business plan and ask their advice. Better yet, ask them to review your plan when it’s ready and give them a date. This will give you a deadline to hold yourself accountable.
Debbie Donaldson is founder and CEO of b2bENTREPRENEUR.org providing consulting, resources and education for entrepreneurs.