A colleague of mine uses the phrase, “See me before you need me,” in her advertising which makes me think of another phrase, “Failure to plan is planning to fail.” Ok, maybe that last phrase may be a bit overblown as most of us go through life on a minimum of planning, for example my daily wardrobe, and do just fine. While most of us can afford that luxury, as a business owner failing to plan may cost you, maybe even result in the loss of your business. Be not disheartened! With some proper planning many common business problems can be mitigated or avoided before they occur, not to mention at less cost and aggravation!
Successful strategies are like old time sea captains. While at sea, the captain scanned the horizon with a periscope to looking for pirates (Y’argh!), I mean problems; with advance warning of a problem he could plan what to do next. However, not all problems are readily apparent and so the captain surrounded himself with able hands, such as the pilot who could warn the captain of dangerous obstacles. So breaking that lovely analogy down a bit, successful planning requires a business owner to consider the future and see what problems may be lurking while also consulting with advisers to plan for those problems that are yet unseen.
Unfortunately, most business owners plan like they are alone in a car while driving ahead using the rear-view mirror. Not a strategy likely to succeed. Without concentrating on the road ahead, and with no one to keep you on track, the owner may quickly drive off course and end up in the ditch or worse. Here are some common planning fails:
- Hiring employees without understanding the law or all the recordkeeping requirements.
- Not properly managing cash flows.
- Failing to consider how the business should be managed, especially when problems arise between owners.
- Not talking with an insurance agent to obtain the proper coverage for your business.
- Failing to properly set up a bookkeeping system or to find someone qualified to properly manage the books.
- Not properly segregating the business from the owners’ personal lives, i.e. treating the business like a piggybank.
Let me be clear, I am not saying that all problems result from poor planning. I am saying planning can help avoid or mitigate many problems, especially if you have advisers to help you. So plan ahead! Get an accountant! Get a lawyer! And get an insurance agent! Ok, that is enough soapbox speechifying for now. Do right by your company and start planning!