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Two Business Planning Pitfalls and How to Avoid Them

So you’re ready to set up a small business or embark on a big expansion of your existing one? You may be itching to get going, but many people make two critical errors at this point: they don’t take the time to figure out what their ultimate goal is in starting or expanding a business, and they have no idea how they will actually reach that goal.  However, by doing a bit of upfront work you can avoid these potential pitfalls, and make sure that your business project starts off on the right foot.

Step 1: Define Your Goal

Before you try to figure out what work needs to be done, you need to clarify your goal by asking some basic questions:

  • Why are you doing this? What’s your purpose?
  • Is there a less risky or lower cost way to achieve that purpose?
  • Can you actually do this? Do you have the skills, the resources, the money, the time, and the patience to get there?
  • Is there some other project that would be a better use for the limited resources you have?

Once you’ve decided that this project is the right one, you need to get control of the details. For example, if you’re starting a coffee service for small companies, do you know what your service will offer? There is a vast variety of coffees, creamers, sweeteners, teas, dried soups, noodle bowls, packaged snacks, and so on. How do you choose which ones to offer, and how do you decide without being arbitrary?

Once you’re clear on your project, you need to get control of the risks. What can go wrong and how can you avoid problems or reduce their impact?

Step 2: Identify the Milestones, Tasks and Inputs

At last, you’re ready to determine what tasks you need to carry out to reach your goal. But where do you begin? If you’re like most people, you’ll sit down with a sheet of paper and start brainstorming. However, this kind of unstructured approach isn’t the most effective way to plan because you can easily overlook some of the tasks. In order to identify all of the tasks in your project, you will need a more formal process. First, break your project down into milestones. There are four kinds:

  • Adhering to legal, financial, or government requirements such as licensing, financing, or liability.
  • Developing or acquiring the products or services that you’ll offer.
  • Setting up your physical office or storefront and preparing your business processes such as billing or accounting.
  • Getting ready by hiring and training staff, stocking shelves, and starting your marketing.

Ultimately, you should end up with five to fifteen milestones depending on the project. To identify individual tasks for each milestone, simply walk through the steps that you’ll have to do to reach it.

Once you’ve identified these tasks, look at their inputs – the things you have to have in order to carry out the task. For example, in order to stock shelves, you’ll need shelves to stock, stock to put there, a place to receive shipments, money to buy the stock, and purchase agreements with suppliers. Keep in mind that inputs must come from somewhere – they either originate from within another task in the project or from an external source. If you find an input that doesn’t have a source, you’ve identified a missed task that you need to complete first – add it to your plan. Only after completing these processes will you truly be ready to embark on your project.

Taking Time for Business Planning Is Your Plan for Success

While taking time to plan may seem like an unnecessary roadblock to putting your big ideas into action, you’ll likely find that the time you invest upfront will pay off over the long-term. You’ll know if your business project is feasible and even worth pursuing at all, and if it is, you’ll have a clear goal and a step-by-step plan to reach it.