I cannot emphasize enough the importance of doing your homework and not skip a very important component in your entrepreneurial venture. I am talking here about your business plan.
You probably have heard a million times about the failure rates of start-ups. And the number one reason mentioned for the cause of failure is lack of planning. That is a reality. And what a better way to prepare yourself to face the uncertainties of your business venture by having your business plan handy. Similarly, when you go on a road trip and you are not sure as to where your destination is, you equip yourself with a map or a GPS.
A business plan is your road map to achieving what you want accomplished in your business. It is your GPS in the business world. It helps you chart your course and provide you with alternate routes when one route seems unworkable. Change is constant and so your business plan has to be revised to meet the challenges that you will encounter in your business. It is a living document. And you, as the one who navigates your business must accept change and remain flexible.
A classic story that comes to mind in my years in business is the story of Ross Perot who was at that time one of the major stockholders for General Motors. He saw the coming invasion of compact cars and told the Board to change its strategies. GM at that time was heavy in the manufacture of big guzzler cars.They did not heed Perot’s warning and soon GM was faced with the onslaught of compact cars from Japan. That was the period that GM started losing their market share. It was a very hard lesson for GM!
The sad part about it is that then General Motors Corp. Chairman Roger Smith said that H. Ross Perot was not a team player. Ross Perot was given a $742 million buyout package from GM. (Source: UPI Archives, Jan. 7, 1987).
The lesson to learn here is to be flexible.Watch the market trends. Learn to embrace change. Listen to what your colleague or mentor is saying.
Just like a road map, your business plan will tell you whether you are off track.