No Goal without Goalpost: The Importance of Planning Your Business
Goals are very important in any business venture, since one of the aims of setting up a business is to make profit. Setting goals will help you work at certain strategies that would help you attain your desired achievements. More importantly, set specific goals; it helps elevate your business. For instance, Saying, “We want to make a lot of profit at the end of the year” sounds good, but it is not a specific goal. But if you said, “We will make a fifteen percent net worth margin from the sales of sunscreen (or whatever your product is) at the end of 2020” seems more like a specific and measurable goal which one can work towards. Employees prefer to know what target the management wants them to hit or what problem they are expected to solve, and this is one of the reasons business leaders needs to clearly understand the subject of goal setting very importantly.
Achieving your goals makes you fulfilled, no disputing, but goals cannot be scored without a goal post. In other words, to achieve a business goal, you need to have a business plan. You might wonder if it is necessary to have a business plan. It absolutely depends on you and what kind of future you dream for your business, say, in the next five to ten years. If you do not see yourself continuing that business or expanding it in the next five years, then you might not consider planning the business at all, if you however see yourself doing great and succeeding in that business with expanded horizons, then you need to consider planning your business. By “recording” your dreams and goals on paper (business plan), you set in motion the process which leads to achieving those goals.
Below are some of the reasons why it is important to plan your business
- Helps you fix a goal: as I mentioned in the preamble of this article, goals are what keep you going and determined. Setting goals for your business will empower you to work hard to achieve them. There is no progress without s goal. So, planning your business helps you set goals for yourself; ranging from daily targets to monthly or annual. Some business plans can be written with 10 years in mind, setting long term goals to be achieved over a wide range of time. “All who have accomplished great things have had a great aim, have fixed their gaze on a goal which was high, one which sometimes seemed impossible.” —Orison Swett Marden
2. Helps you hit your goal: if while planning your business as a baker, you have a target of selling hundred plates of cakes before the week runs out. This is specific goal, but how do you achieve your target sales, that is where business planning comes in. You could target customers in your environment first and advertise to them, you could make people place orders while you deliver to them at their respective locations. At the end of the week, you might even sell more than your target. This is planning. You hit your business goals by planning your business, because a business plan nit only set business goals, it also tell you how to achieve those goals. “Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” —Pablo Picasso
3. Prepares you for challenges: challenges are inevitable in life, so also in business. Challenges will come no matter how hard you try to escape them. And one thing about challenges is that they come unannounced or unexpected, but how well you handle them and overcome the situations will go a long way in determining the kind of man you’ve grown up to be. In planning a business, you plan also for the days when things would go wrong. If you planned to sell hundred plates of cake in a week but ended up selling less than fifty despite putting so much time and money into advertisement, how would you feel?. The way you handle your shortcomings determine how strong a person you are. After all when we fall into the earth, we do not sit and sink into it, instead we rise and do the needful. This is what business planning would teach you; how to handle shortcomings when they arrive.
4. Helps you control your finances: the main aim of every business is profit making. There is a saying that you do not have to spend a lot of money to make a lot of money. Planning a business helps you to control the financial cost and growth of your business. If yours is a partnership business for instance, an equal partner might want to demand equal right to fund and administration. More so, it helps you control spending. Knowing forehand that you only plan to spend a specific amount in cost and make a specific amount or more in profit will help you in minimizing spending and maximize profit. By also setting annual revenue in your plans, you tend to achieve more goals. It is always advisable that while setting annual revenues, also consider the revenue in five years, how much would be generated in the next five years and its market share in that period.
5.How to use your plan; this might seem funny to you. Nevertheless, the truth is, many people plan their business and end up not using the business plan, some even used it but in the wrong sense. So while making a draft of your business plan, you should do so with the aim of using it and using it in the right way . For instance if the sole aim of your plan is on how to make money, you might want to focus more on the management and executive functions, because these are channels through which profits are made. So make a business plan that suits your goal or target.
In the words of Norman Vincent Peale, “All successful people have a goal. No one can get anywhere unless he knows where he wants to go and what he wants to be or do.”
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