How Does Planning Aid Small Business Growth?

Do you know what happens when you try to get a house or a building, or any other infrastructure built without a blueprint?

Total chaos.

The tendency is you won’t have a clear idea how to start, and even if you think you can wing it, at some point, you won’t know how to finish. A lot of times, you will argue with the people involved in the construction because what was initially planned to be executed the week before can always change in the absence of a blueprint– a clear plan.

On top of all the stressful interactions among engineers and architects, contractors and future owners of the house/building, the cost of the construction may also swell up to two or three times the initial agreed budget.

Why? Again, in the absence of a solid plan, everything is fluid and therefore changeable at any given moment.

A blueprint, or an actual plan, will save you not only a few hundred grand, but also from the stress and drama that comes with having something built.

Interestingly enough, the same is true when building a small business. In this article, we are going to answer the question: How does planning aid small business growth?

Let’s find out why planning is important to small business growth!

Reasons Why Planning is Important to Small Business Growth

There are a number of reasons why planning is important to small business growth. While the list can be a bit long, we have culled all probable reasons and came up with a list of reasons that make the most sense when one is attempting grow a small business.

Check them out right below!

You Can Stick to the Budget

It shouldn’t come as a surprise that this comes first on the list. Starting a small business implies operating on limited funds. Some may probably be backed by wealthier investors but even then, there is a prescribed budget within which a small start-up business must operate. If you’re wondering how planning aids small business growth, this is how.

When you have a plan, you can work with a budget and not go beyond it. You can maximize financial resources because you have thought it out, you have looked into the nooks and crannies of the business proposition and saw what requires most of your cash. Without thorough planning, you might be in danger of wasting a lot of money on unimportant things.

Performance of a SWOT Analysis

Here’s another good reason why planning is important to small business growth. When you come up with a plan, it is only natural that you perform a SWOT analysis. You identify your strengths and weaknesses, you look into the opportunities and prepare against threats.

You ready yourself for what’s to come, and you leverage the strengths and opportunities because you were able to identify what they are in the first place.

You Have a Ready Business Plan to Present to Possible Investors

When a business has just started, it might take a while before it takes off. This means that the tendency for the owner to run out of funds is high. In such cases, investors might be needed to keep the business afloat. Situations like this perfectly illustrate why planning is important in small business growth. When you are in the process of convincing a possible investor to make an investment, having a ready business plan that showcases the beautiful possibilities of your start-up will come in handy.

You Can Create an Efficient System

As we have mentioned in earlier articles, having an efficient system will greatly improve the way you conduct your basic operations. From the taking of orders, logistics, and recording of daily income, entrepreneurs who plan can figure out ways to come up with a smarter, more efficient system.

You Have Bird’s-Eye View

Entrepreneurs who plan have an edge compared to those who wander aimlessly into the business world without any semblance of preparation or planning at all. When you plan first before execution, you have a bird’s-eye view of everything. You can implement strategies within strategies, forecast sales, and prepare for probable losses or even prevent them because you already saw it months before and have prepared your business well enough to survive it.

This is what separates entrepreneurs who plan from those who don’t. Having a plan allows you to make decisions as if they were Chess pieces on the Chess board.

Final Take: How Does Planning Aid Small Business Growth?

At the end of the day, entrepreneurs who plan have better chances of their business taking off than entrepreneurs who make no plans or very little of them.

There’s a famous adage that says: “By failing to prepare, you are preparing to fail”.

When it comes to running a business, plans help you survive more curve balls. So if making the choice between coming up with a well-thought out plan and diving headfirst into the unknown, most of the time, it is best to make calculated risks.

How do you come up with a calculated risk? By spending some time making plans.