Avoid These Common Business Planning Pitfalls
Failing to plan is planning to fail. We have all heard this adage, but it rings especially true for business owners. Starting a business or taking over an existing business is a thrilling move for a would-be entrepreneur. However, when eagerness leads to haste, it is surprisingly easy to make mistakes that have significant legal and financial implications. Proper business planning is key in setting your business up for continued success.
For those who already own a business or who are in corporate leadership roles, it is also important to be continually planning for the future. Your industry and the overall marketplace will not remain stagnant, and neither should your business.
Unrealistic Assumptions in Your Business Plan
Your business plan is one of the most important documents you will ever prepare as a business owner. The business plan describes your company’s objectives and how you plan to achieve these objectives. A well-written business plan should include:
- A description of your business’s products and services
- An analysis of the industry, target market, and competition
- Strategies you will use to attract customers and rise above the competition
- Realistic financial planning and a budget
No one can predict the future. Consequently, your business plan will almost certainly include a number of assumptions. Make sure to identify the assumptions you are making about customer buying habits, competition, and marketing trends. You should also be able to justify these assumptions through up-to-date data and robust research.
Failing to Prevent Avoidable Legal Problems
Many new business owners do not fully the role that federal, state, and local laws and regulations will play in their business. Choosing the wrong business entity, not obtaining the appropriate business licenses and permits, inadequate tax planning, and poorly-designed business contracts are just some of the mistakes that can lead to massive legal headaches. If your business is too small for in-house legal counsel, one option for protecting your business and avoiding unpleasant surprises in the future is outsourced general counsel. This cost-effective option allows you to benefit from legal guidance and direction before a problem arises instead of scrambling to hire an attorney after a problem has already occurred.
Not Establishing Employee Policies and Procedures
An employee handbook is one of the best tools business owners have to avoid employment-related lawsuits and to set the foundation for their business’s success. Describe your company’s code of conduct, work hours, and benefits. Explain the performance review process and how and when disciplinary action is taken against employees. Include your anti-harassment and anti-discrimination policies and the procedures for reporting harassment or discrimination. Most importantly, follow through with these policies and procedures for each employee.
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Proper business planning is key to avoiding legal and financial mistakes that put your business at risk. Create a robust business plan that outlines your company’s goals and how you intend to achieve these goals. Implement policies and procedures that will protect your business from lawsuits. As you focus on the priority of keeping your company moving in the right direction, it is important to have a legal professional on your side looking out for your best interests. A Naperville business lawyer at the Gierach Law Firm can greatly help do just that. Call 630-756-1160 for a confidential consultation.