Planning can help companies grow 30% faster

One study, published in 2010, aggregated research on the business growth of 11,046 companies and found that planning improved business performance. Interestingly, this same study found that planning benefited existing companies even more than it benefited startups.

But, this study still doesn't answer the question it raises:

Why would planning help a business that has a few years of history more than one that is just starting up?

The answer most likely lies in the fact that existing businesses know a bit more about their customers and what their needs are than a new startup does. For an existing business, planning involves fewer guesses or assumptions that need to be proven, so the strategies they develop are based on more information.

Another study found that companies that plan grow 30% faster than those that don't plan. This study found that plenty of businesses can find success without planning, but that businesses with a plan grew faster and were more successful than those that didn't plan.

To reinforce the connection between planning and fast growth, yet another study found that fast-growing companies--companies that had over 92% growth in sales from one year to the next--usually have business plans. In fact, 71% of fast-growing companies have plans. They create budgets, set sales goals, and document their marketing and sales strategies.

Business planning is not an activity you undertake only when you're getting your business up and running. It should be something you return to, time and time again, to revise and improve upon based on new knowledge.

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