The Entrepreneurial Spirit Still Needs a Business Blueprint
The private sector generates the majority of jobs in America. Within the private sector, small business contributes significantly to job creation and is recognized as the economic engine that drives commerce in America. Thousands of business start ups occur every month, but many of them close their doors before their first year in business. Many times, the entrepreneurial spirit is willing, but the lack of a business plan weakens the potential for success.
Rarely do you find a business plan among passionate entrepreneurs. Many first-time business owners have the emotional energy needed to lift their burgeoning business off the ground. They generally display what can only be described as parental feelings toward their enterprise, very much like the affection shown a child. But like a new parent, their child didn’t come with a manual. Without a business plan, the odds are stacked against success and staying power.
One of the new approaches to business planning is defining its future sale, basically reversing engineering of the plan from that point back to its inception. It’s a unique methodology that drives current corporate goals, strategies and tactics to the ultimate target in the future. One differentiating characteristic of this plan is its frequent accountability assessments, basically an inherent surveillance system with hard benchmarks to measure goal achievement along the way. Without accountability and consequence, a plan has no teeth to it nor does it have built-in reward mechanisms to recognize personal performance and corporate success.
It’s like an architect who designs a blueprint to be used in the purchase order of the building materials and orchestrating the various stages of construction. It’s often in these early planning stages that the corporate entity is identified, i.e., C- Corp, S – Corp, LLC or Partnership. Selecting the right entity to incorporate your business may also have favorable tax advantages that should be investigated, not only at the corporate level, but also for the personal benefit of the owner(s).
Business planning, especially for the succession of the business, is a very complex discipline and will generally require the efforts of more than one professional. Selecting the right members of the team at the conception of the business can pay off big at its sale.
Syndicated financial columnist and talk show host Steve Savant interviews Jasmyn Nakata, co-business owner and entrepreneur on business planning strategies. Right on the Money is a weekly one-hour financial talk show for consumers.