Monthly Archives: April 2012

The Importance of Developing and Following a Business Plan

The Importance of Developing and Following a Business PlanGood business plans are an essential foundation for all successful bakeries. It is amazing how many small business owners overlook the significance of having a detailed and well thought-out plan or do not follow the plan once the business begins.

So, not only do you need to write a solid financial, marketing and operational plan for your bakery, you need to follow it. More importantly, you should improve it as you go along by refining certain parts to account for real positive or negative issues that arise in the day-to-day operations.

All too often, bakery owners have already developed a properly researched plan of action, but when some of the actual events turn out differently from the plan, they lose confidence in the initial plan and abandon it, instead of correcting it. This usually results in a lot of ad-hoc decisions that are unplanned and impulsive.

The daily operations of a new bakery can be very chaotic and extremely overwhelming, especially for someone who has never been involved in starting a small business. If most of the things that need to be done have been planned and accounted for, the tasks can be more manageable. However, when they are unexpected due to poor planning, the business could suffer greatly in the crucial first few months when it is vital to get off to a good start.

It is normally a good idea for owners to take time out from the normal operations to do business planning analysis fortnightly, weekly or maybe even more often during the initial startup period. This time should be spent on assessing whether the business “is going to plan”. It is a time to reflect on the effectiveness of the plan and to develop strategies to overcome any unforeseen challenges that may have arisen.

Ideally, this business plan assessment exercise should be done in a team where different people can offer feedback and suggestions. If you are a sole proprietor who has developed the plan on your own, you should try to do these reviews with a couple of third parties who can provide objective and constructive input on ways to improve it.

Going through the business plan with your accountant and the most senior member of staff at your bakery may be possible options if you do not have a business partner. Where possible, try not to do it all yourself so that you can get a wider perspective from others who may be able to see things that you’ve overlooked.