What Every Entrepreneur Should Know
An entrepreneur may be one of the most demanding jobs in the world; but it’s also one of the most rewarding. There are already a lot of entrepreneurs out there. Yet, the truth is, not every entrepreneur isn’t going to make it. On the upside, anyone can try again; and when it comes to being an entrepreneur, you only need to be right once. To get it right sooner than later, you need to increase the odds in your favor as much as possible. One of the common mistakes that entrepreneurs make is the lack of planning.
When it comes to starting and running a business, almost everything in your business needs to be planned. This can be a source of confusion and frustration. To help you sort things out, this article is going to cover business planning, exit planning and succession planning.
Most entrepreneurs out there, especially the “mom and pop” kinds of business, don’t have a clear and thorough business plan. This is one of the biggest reasons why a business has difficulty growing. Always remember that failure to plan is a plan for failure.
One of the most fundamental kinds of plan for a business is the Business Plan. Everyone defines a business plan differently. However, at its core, a business plan is a kind of roadmap for the success of your business. A business plan is more than a piece of paper, it’s a living plan for the next 3 to 5 years of your business. For most businesses, the business plan outlines the direction of the company, including how will it grow and scale-up.
Most entrepreneurs are focused on getting the ball rolling. However, if you ask most entrepreneurs what their exit strategy is, most of them will be looking at you like a deer caught in the headlights.
Ask any stock or bond trader and they will tell you that the exit is just as difficult as the entry. Building a business is the same way. Most people simply don’t know when and how to exit.
Let’s face it; sooner or later you have to exit your business. There could be two reasons why you would want to exit a business – the business is failing or your calling quits running your business.
Now this article asks you, do you have an exact plan when you should quit a failing business? Remember, its better to fail fast and start again, rather than prolonging a business doomed for failure. If you can’t answer the question, then its time to clearly define your exit plan in the event that your business is failing.
Another question, how will you exit a successful business? Remember, you don’t go to live forever. If your idea of exit is selling the business, then you will need to formulate a plan that will maximize the value of your company so you will get the most of the sale. Keep in mind that part of the exit planning leads to the idea of succession planning.
A company’s true resource is the people behind it. Therefore, every key position in your business must have a succession plan.
A succession plan is all about the process of identifying and developing one of the company’s employees with the purpose of filling key positions within the business.
For example, if you are planning to sell the company, do you have an idea who will replace you as CEO? If you prefer that the new CEO comes from one of your employees, then its time to formulate a succession plan.
Keep in mind that succession planning is not only limited to the CEO position. Succession planning applies to every key position within your company. Succession planning is also important to keep your business running as smooth as possible.
If you simply rely on one individual for a certain position, and you don’t have a backup plan or backup personnel, your business might be at risk if the key employee is unable to fill the position anymore.
To succeed in business, you have to develop a long-term plan. A few key plans that every business should have are business planning, exit planning and succession planning.