Five Questions to Ask About Your Business Plan | Management …

It never hurts to step back every once in a while and take stock of where you stand. With that in mind, here are a few questions to mull over before you show your business plan to the world.

1. are your goals tied to your mission? look at the goals that you set for your company. these goals are the results that you absolutely, positively intend to achieve, and to a large extent, these goals determine how you set priorities and how you run your company. your goals have to be consistent with one another so that you’re not running in different directions at the same time. In addition, you have to tie your goals to your company’s mission so that you’re heading in the direction in which you really want to go.

2. have you prepared for threats? It’s easy to paint a rosy picture of what the future holds for your company, but having a rosy picture doesn’t necessarily mean that it’s going to come true. your company is in much better shape if you paint an objective picture — including the bad news along with the good. that way, you’re prepared for the dangers that are bound to be there.

Your business plan should point out the biggest threats that loom on the horizon (a market slowdown, new regulations or increasing competition, for example) and offer ways to prepare for them. if you recognize threats before anybody else does, you can often turn a threat into a real business opportunity.

3. have you defined your customers? The more you know about your customers — who they are, how they act, what they want — the more you know about your company. Customers tell you how to succeed in the marketplace.

Describing your customers is much easier if you think about dividing them into separate groups. each group, or market segment, has its own unique profile and places its own set of demands on your company.

Your customers are so important to your company that you can’t afford to leave them out of your business plan. You should answer three questions: Who is buying, what do they buy and why do they buy?

Your plan should explain how your company intends to serve those customers better than anyone else out there.

4. Can you stand behind the numbers? Think about all your financial statements as your company’s report card — one that answers some big questions. Do your customers love you? are your competitors afraid of you? are you making the right business choices? an income statement presents the bottom line, the balance sheet shows what your company is worth and the cash-flow statement keeps track of the money.

Your current financial statements tell everybody how well you’re doing. but many people are more interested in your financial forecasts, which say what you expect to happen in the future. Just because these forecasts include official-looking numbers, however, doesn’t mean that the predictions will necessarily come true. if you want to paint an honest picture of your company, your business plan should include a realistic financial portrait, based on assumptions that you believe in and numbers that you trust.

5. are you really ready for change? if one thing remains constant in the business world, it’s change. although some industries change faster than others, everything around you — from technology to competition to your market — is going to be a little different tomorrow than it is today, no matter what business you’re in. if you want to keep up, you have to think two or three steps ahead. You must look carefully and continually at what may happen in the world and how it may affect your company.

Although your business plan paints an honest picture of how you see your company and what you see happening down the road, the plan should also acknowledge the fact that you don’t have a crystal ball. So present some options. Include one or two alternative business scenarios, asking — and answering — the question “What if . . .?”

Article reprinted from Business Plans for Dummies, by Paul Tiffany, Ph.D. and Steven D. Peterson, Ph.D., Copyright 1997 IDG Books Worldwide, inc. all rights reserved. used by permission. for Dummies is a registered trademark of IDG Books Worldwide, inc.

Five Questions to Ask About your Business Plan | Management …