Most people who are thinking of starting a business intuitively know that business planning is something they should do, yet most people either don’t do it or don’t complete the plans they start. From a completion standpoint business plans are not completed because the process is too hard, too long, and too cumbersome. Fortunately the 21 Question Business Plan™ dramatically helps in all those areas.
In 2011 in our little state of Minnesota over 80,000 new businesses started. It is my opinion that less than 25% of these new BizOwners went thought the planning process before they stated their business. Just because someone knows they should do something (create a business plan) doesn’t mean they will do it. The purpose of this article is to further convince you that business planning is really critical to new business success and to reaffirm to you that buying this kit, was the right decision for you to make. Let’s look at the three main reasons why business planning before starting your business most often leads to a successful business.
Reason #1 for creating a business plan before you start is that the business planning process decreases failure rates in a big way. If you don’t want your business to fail, then your probability of success increases by doing a business plan before you start. Failure rates for new businesses in the first year are in the neighborhood of 25%. Take into account the fact that many people start a sole proprietorship and simply cease operations without notifying anyone and this failure figure could be as high as 40% in the first year! National statistics show that the chances of a business surviving for three years are only about 44%. In an article that appeared in Business Week Small Business titled “The Bottom Line on Startup Failures” (March 4, 2002) there was the following quote:
“Clearly business planning plays an integral part of success. We studied firms that had developed a business plan at the outset, and found that 85% were still in business after three years. I think that fact speaks for itself!”
There is a huge difference between an 85% success rate and 44% success. No one starts a business with the expectation of failure, so if you want to really increase the chances of success then you need to go through the entire business planning process before you start your business. Look for the other three reasons shortly! If you have any questions or comments, e-mail me at firstname.lastname@example.org