The Small Business Administration's Office of Advocacy defines a small business as an independent business having fewer than 500 employees. In the U.S, small business make up 99.7 percent of employer firms which is the engine of the U.S economy. Small business accounted for 63 percent of the net new jobs created between 1993 and 2013 (14.3 million of the 22.9 million net new jobs). However, what is the survival rate for a new business?
About half of all new establishments survive five years or more and about onethird survive 10 years or more. Most entrepreneurs are technical experts and start a business without any formal training in business management or principles. Successful entrepreneurs recognize that, as their business grows, they will need to transform from a manager of things to a manager of people and from a technical expert to a strategic thinker. This is often difficult; however the successful entrepreneur either makes this transformation or determines early on to invest in hiring management expertise. Statistically successful business are those that are open and willing to change in order to achieve their goals. Successful businesses also possess a strategic business plan, organizational structure, operational policies and procedures, and marketing and business development strategies.
Why a Strategic Business Plan?
- Essential to secure funding from a financial institution.
- Vital aid to help you manage your business
- Assigns milestones to individuals and helps management monitor progress
- Assists in managing cash flow (a fundamental requirement for all businesses)
- Helps you assess future opportunities and commit to a course of action that aligns your company to keep focused on key objectives.
- Supports a strategic exit, via family succession, sale, merger or buyout.