“The American Dream”

Owning a business is the American Dream – thousands of people have done it very successfully. Unfortunately, thousands more have failed. Some studies indicate that 50% of business startups close within their first 4 years. And most of those close during the first 1 to 2 years (1).

The simple reality is that improved planning can increase the success rate dramatically, whether you are a start up or have been in business for some time.

Author Michael Ames, in his book Small Business Management, lists the following ten reasons for business failure:

• Lack of experience
• Insufficient capital
• Poor location
• Poor inventory management
• Over-investment in fixed assets
• Poor credit arrangements
• Personal use of business funds
• Unexpected growth
• Competition
• Low sales

Most of these shortcomings indicate a lack of planning and preparation. Planning for these situations and many more are researched and documented in great detail during the writing of a comprehensive business plan, a document that should be completed in total prior to any business startup. If you're up and running already, and don't have a business plan, you can still get to work writing one that will keep you in business. Let the Small Business Development Center help you.

A business plan is exceptionally important for two reasons:

1. It is the roadmap for achieving success, and
2. It is a basic requirement for securing funding.

According to the Small Business Administration (SBA), “A business plan precisely defines your business, identifies your goals, and serves as your firms resume. It helps you allocate resources properly, handle unforeseen complications, and make the right decisions. (2)”  There is no substitute for critically examining the whether your venture can produce acceptable levels of profit and cash flow. Equally important is your identifying, understanding and addressing all the associated risks and barriers.

Writing an excellent business plan requires a great deal of time and effort, but help is available. Templates can be found by visiting the library, performing an online search, or calling the local Small Business Development Center at 815.599.3654.

The SBDC also provides self-help seminars and private counseling to assist document development. – at no cost. Again call me at 815.599-3654 or russ.simpson@highland.edu. Set an appointment – emails and phone calls are returned with 24 hours.

More potentially expensive: there are also consultants who specialize in creating customized business plans.

Owning a business can be a very satisfying and rewarding experience. Writing a comprehensive, pre-venture business plan will greatly enhance your possibilities for success!

Russ Simpson, SBDC Coordinator
Illinois Small Business Development Center at Highland Community College

1 www.sba.gov/advo/stats/bh_sbe03.pdf
2 www.sba.gov/smallbusinessplanner/plan/

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