Business Planning Pays

Don’t get discouraged. Some businesses lose money. You made money, but you didn’t do quite as well as you had expected. This shows the importance of a business plan that includes financial projections. It also shows the importance of remaining flexible and adapting your plan as you learn more about your business.

Every business venture is truly an adventure. Successful entrepreneurs are able to adapt as the market changes and new information is gathered. If things aren’t going as planned, you can change your business plan. In fact, smart business owners do change their business plans and update them frequently.

Consider the story of UPS, a multi-billion dollar company that affects the lives of 12 million Americans daily. However, it started in 1907 when the founder, 19-year-old Jim Casey, borrowed $100. With the help of a few friends, he began to deliver messages and packages from one local business to another by bicycle.

How detailed do you imagine Jim Casey’s business plan was in 1907 when he started the company? Most likely he was able to put together a functioning business plan in one day.

His business grew steadily, but he had trouble maintaining profitability. In 1917, he was turned down by the bank when he tried to obtain a loan to expand the business. What did he do? He changed his business plan and developed a more efficient delivery system by organizing all the deliveries for one neighborhood into one truck.

Soon he was consistently profitable again and decided it was time to expand from the company’s home base of Seattle, WA to other geographic areas. In order to do this he needed to draw up a more detailed business plan than the simple original plans with which he had started.

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