Businesses should work potential setbacks into their plans

Most Illinois entrepreneurs understand that they need to have a business plan. However, even meticulous planners could end up falling short of their revenue goals and miscalculating their budget if they don't plan for setbacks. Though it's good to have an optimistic attitude, it's also crucial to understand that unexpected events can easily throw plans out of whack.

Some business planners recommend making the assumption that all projects will take twice as long as anticipated and achieve only half of the results that are expected. By working potential delays and problems into a business plan, a company can be better prepared to handle these setbacks if and when they arise. Even budgets that are planned in detail should be increased by about 10 percent to account for unexpected expenses.

A few of the things that can be disruptive include delays in payment, shipping losses and theft. If customers take longer than expected to pay off their invoices, these delayed payments could affect a company's cash flow. A business may also suffer a financial setback if items that were sent to customers are lost by the carrier or items are stolen from a warehouse. A business plan should include exaggerated costs to account for potential losses and contingency plans for worst-case scenarios.

A realistic business plan can help owners with their own planning and budgeting while also making their company more attractive to investors. A business and commercial law attorney may be able to help business founders to draft a business plan during business formation. While business founders are writing their initial business plan, an attorney may also help them with regulatory compliance issues.

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