A client recently came to our office and shared with me her story. Long ago, she said, a friend told her: just do it! And she followed his advice, and just did it: started a business, with no business plan, no goals, no market segmentation, no signed up clients. Six months later, she ran out of cash. She went a got a loan. Another six months later, she defaulted on the loan and had to close the business. This is not a singular case. Studies show that over 50% of new businesses fail within 3 years. The main reason? Cash flow issues. They run out of money. Why? Because they don’t plan properly.
As a thoughtful entrepreneur, you want to cover your back regardless of outside market conditions. You want to minimize your risk. You want control over what happens inside the business. You want to adjust to market volatility. And you just can’t do this without proper planning. A software that you plug numbers in won’t do it for you. Business is not about numbers. Business is about psychology and sociology. And no software can master these two arts.
The question may rise: well, I didn’t go to business school, so how do I plan? This is where you need an expert to come and help guide you. You don’t have to follow all the advice you receive – but a different perspective, and even more than one, can’t hurt your planning process. Rather, it opens up perspectives, opportunities and angles that you may not have even considered before.
One of my professors in Business School, Gary Hoover, founder of Hoover’s Market Research, told us how, when he started one of his most successful businesses, he researched the industry for 7 years before starting it. 7 years! The outcome? The company was sold to Barnes&Nobles for a 9 figure sum.
Maybe you don’t expect that kind of success, but you surely don’t want a failure either. What should you do? What does our experience with thousands of clients encourage you to do? Plan. Think it through. Get help from experts. It’s more than your ego at stake, it’s also your life savings, your child’s college fund, your credit score, your cars, or whatever else you are willing to put on the line to fund your business. The thought we want you to carefully consider is: planning is essential for the success of my business. Start today with a business plan.