Approximately 60% of all small businesses fail within the first three years of establishment. Reasons for this include lack of management expertise, poor or no use of planning or simply forced out through competition. However, before this can be discussed, it is essential to question what a business plan is, the planning process and sources of business planning. Without the use of business planning and the correct procedures put in place to execute these plans, it can be said that businesses do not plan to fail, yet fail to plan.
A business plan is defined as the written statement of the goals and objectives of a business and the steps to be taken to achieve them. Without the use of appropriate planning, it can only lead to failure in business, which is why they must be comprehensively written. Just thinking about what is likely to occur is useless, as the chances of success are greatly diminished this way.
Elements that business owners often disregard to include in a business plan are: their present situation, where they would like to be in the future, how they plan to get there and eventually, whether they have achieved this or not. Many business owners complain that "Nobody reads them (business plans) once they have been written," which is upsetting and plans should be constantly revised and if needed, altered to suit changes in working conditions. So, although it is a disappointing reflection upon reality, it can be shown that businesses do not set up to fail, yet they do fail to plan.
Planning is a process and can therefore, be defined as the process of formulating objectives and determining how to achieve them. All business must have goals and objectives, as without them, they can find it very hard...