It is important to know that we should be very good at planning. At the bare minimum, businesspeople should know to form a complete business plan before they start operations. Many new business owners fail at planning properly due to various reasons. A good business plan will not only be a guide to the future or act as a roadmap, but also give us an insight on all critical issues that we need to confront in the future. The smartest and very best business people often give a lot of thoughts on many things that can happen. This will give them an opportunity on things that they should do. On the other hand, least successful people would give no thought at all on business planning. When preparing business plans, we should allocate enough time to carefully analyze and justify every single cent we spend. Business plans should also include concrete and clear goals on how our business should proceed. As an example, we should know about the quantity of our product and how much we intend to sell each month. The projection should be reasonably accurate until up to two years in the future.

Our ability to properly project our sales should be the key measure of our business ability and intelligence. Once we are able to estimate our likely sales conservatively, we should be more proficient in getting to the number that’s closer to reality. Our business goals will become more realistic. Everything won’t take three times as long or cost twice as much to complete. Many businesspeople are able to avoid problems by not being too optimistic or too conservative. A business plan should include every single expense that we need to incur to achieve specific goals. It is important to consider all possible costs, such as telephone, rent, printing, utilities, photo copiers, stationery, employee salaries, office furnishing and many others. We simply need to know about the costs of doing business. After we calculate the total costs, we should add another 20 percent as fudge factor to make our plan a lot more realistic. It is clear that our business acumen could be achieved only by continuous practices and one of the things we should do is by regularly trying to calculate costs accurately.

It is important to know that we should leave nothing to chance. We need to go over all details again and again. When we prepare business plans, it is essential to estimate and go through every number. This should allow us to perform complete assessments with estimates, researches and documents. The actual proposal needs to properly justify all numbers. It would be a bad thing if we let ourselves be caught flat footed. The bottom line is, business plans should also include a clear projection on profit estimation, because doing business is all about making profit. We can accumulate the total amounts by knowing the monthly basis based to our projections. If we need to lose money for the first three months, then so be it. But it should be clearly mentioned in the plan.