The importance of planning in entrepreneur’s venture
Planning is very important to every venture. It is more important to the entrepreneur's venture because of the uncertainty of success and less room to make mistake.
The entrepreneur's focus is on the execution side and how to get the product to the market in the shortest amount of time so as to start earning revenue.
Because of hurry of execution, planning often takes a backseat. An entrepreneur may shrug off planning because she feels that it takes too much time. Also with the kind of uncertainty an entrepreneurial venture has, the path of execution of the venture (creating the product/service) may be totally different than what was originally planned. Thus small businesses and ventures often put the planning to the side with the assumption that planning works only for large businesses.
In my opinion, this is a big mistake. A small business or an entrepreneurial venture may not be interested in creating large plans that run in pages, but they need to still create a plan.
A plan may be small word document where specific goals that can be measured, are written. In front of each goal, the entrepreneur write the strategy and tactics to achieve that. This would not take long depending on the size of the venture.
What are the advantages of creating a good plan?
A plan helps us to concentrate on our goals
Without specific goals, the entrepreneur will not be able to measure the progress with what she had planned. As a result the goals would change with time leading to a lot of confusion . A good plan talks about strategies and specific steps that needs to be taken in order to achieve the stated goal.
Planning helps us to keep finances on the track
A good plan provides a clear picture of how much money needs to be spent every month or on certain activities. Without a plan, the money projections might go haywire and in the end the entrepreneur may end up spending more than she thought of.
Planning helps to keep track of the progress
With good planning, it is very easy to know how many activities have been completed and how many are remaining. It goes one step ahead to determine if there is any critical activity that needs to be attended immediately. Thus it provides a good picture of where we are currently vs where we planned to be.
Planning tells about the risks we are going to face in advance
Let us say, at certain stage of the venture, government clearance is required. If we had planned well, we would have given sufficient time for getting the clearance. However, if this information was not recorded previously, it would come up later suddenly and the entrepreneur would be stuck in the situation
Planning will help us understand deviations and failure
Often things don't go as planned or simply fail to work as expected. If we had planned well, we would know why a part of thing we planned has failed. We can take corrective steps to bring the venture on course once again.
A lot of entrepreneurs do create plans but do not write them down. Remember we cannot always trust our memories.
Planning may be simple or very complex but it is very important that the entrepreneur plan her venture with enough due diligence.