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Small Business Planning - Or Not!

Guest post by: Tracy Emerick

Article Overview: The concept of business planning is great for large companies, for we entrepreneurs it is a waste of time. The only person who needs your business plan is your lender, but it is more for their benefit than yours. So, make what you give the lender fat so it will fill up their file and believe you know exactly what you're doing. Then go do what makes money and be ready to re-write the plan for the next year's credit line renewal.

Small Business Planning - Or Not!

Business planning is not a good use of time for the small business owner, entrepreneur or home business operator for a few simple reasons:

1. The primary goal of a small business is survival which translates into positive cash flow:

2. Any business with five or fewer employees take direction from the leader or owner with day-to-day information exchange:

3. The plan is effort that is put on the shelf never to be looked at again:

Positive cash flow means more cash is coming into the business than is going out. If a business owner needs to continue to put cash into the business, the cash flow is negative. At some point the business owner will realize that the business is not an "on-going business" it is a hobby, much like a boat or a plane that consumes great amounts of cash and provides something to do. If changes to the business cannot move the cash flow from negative to positive, the only business decision is to shut down the business or use up great gobs of cash while passing the days, weeks or months until the cash runs out. :

One person to five people businesses take direction from the owner and adopt the owner's characteristics with the same end game: to create survival. The owner is the prime mover of the "team" and monitors what is happening on a day-to-day basis for two essential reasons: to make sure the team is moving in the direction the owner directs and makes changes in direction based on feedback from the results of current activities. :

The sample business plan used by people starting a business is a sample for an organization of tens or hundreds of employees where layers of management need "marching orders" in written form to guide their actions. In small organizations the plan required for borrowing money is dutifully put on a shelf only to be pulled out the following year and updated to satisfy the lender. No one in the small organization basis any actions on what is written only what is verbal from the owner. :

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Article Tags: business, business plan, business planning, cash, entrepreneur, flow, planning, small, small business
Referred by: http://jaykubassek.com



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