Business planning is an ongoing process that does not end at the point of selection of an entity form. The evolution from business start-up to the next Texas success story requires a commitment by ownership to analyzing and adapting to the reports and balance sheets reflecting how well or poorly a company is performing. This is where a solid business plan that sets the goals and mission of a company will provide ownership and investors with the tools they need to keep ensure their venture will succeed.
Setting the price for the products or services offered by a business is an example of a common situation that company ownership must handle properly to avoid financial losses. Owners must continuously analyze their marketing plan and sales reports to determine if their pricing policy is in line with their budget projections. If it is not, then something must be done, whether in the form of repricing or the introduction of a new product or service, to remain competitive in the marketplace.
Another area in which business planning is a factor in determining success or failure is financing and cash flow. Entity formation decisions can make it easier for a business to obtain working capital by attracting additional investors. A corporation may allow ownership to sell additional shares of stock to new investors.
An individual with an idea for a start-up might have questions about business planning and the entity form that would be best suited for it. Attorneys might be helpful in answering questions and outlining the characteristics and regulatory issues of corporations, limited liability companies and partnerships.