As a veteran considering starting a business, you may hear conflicting opinions about writing a business plan. Why even write a business plan? There are certainly many excuses not to write one: They’re more trouble than they’re worth… It seems like a writing exercise that’s a waste of time… Nobody reads them anyway… etc. etc. These are notions many entrepreneurs and business owners share about business plans and business planning in general. I’ve had these thoughts myself, even though I invented business planning software. (I did, BizPlanBuilder was the first, 1988.)
The truth is I didn’t like planning at all either. There are too many things going on. Too many changes. Plans are useless especially when they keep you stuck on a narrow path and, if you are really anal about it, you will miss opportunities just because they aren’t in the plan. Are we on the same page? Since I have been through everything entrepreneurs go through myself, I have learned a few things about the benefits of business planning I think you should consider:
“It’s better to take one good step forward
vs. two steps forward and one step back!”
~ Burke Franklin
Like most entrepreneurs and business owners, you may think your real key to survival is simply more sales. Everything else can be managed if you have enough sales. Sales are good, we agree. It’s the structure of your money-making machine that suffers if you let this tail wag your dog. What are you building here, where is it going, how will you most efficiently use your cash to do the right things first? Even if you are not in survival mode, carefully mapping your investments of cash is a wise move. Reducing costs is always a priority. Adding the right thing(s) next is crucial to avoid hiccups in your growth and wastes of cash on projects that must sit and wait until another priority is in place first. A good plan enables you to sort through your puzzle pieces and complete the picture efficiently.
Actually yes. Entrepreneurs are infamous for jumping on deals. All kinds of deals… but do these deals make sense for your business? A good plan includes flexibility to take advantage of opportunities along the way — it provides a context, a framework for what kinds of things you will do as well as not do. If you are good at remodeling homes, you may not do well to suddenly start manufacturing cars, even if you can get a good deal on the equipment. However, it would make sense to jump on a deal for some concrete equipment…
Be careful venturing into a business where you may not have credibility with customers (where they believe that you can provide a good product or service). Building a successful business is hard enough, keeping focused helps your customers understand what you are about, believe that you are good at it, and be enthusiastic about referring others. A good business plan will keep you guided in the right direction and provide room for the right deals.
That’s right. What can you be doing now to build your business? What can you do to add value to your business even if you really need investment capital? What can you be doing that will generate sales? Zooming out to a 50,000-foot view of your business can be a very enlightening experience. Where does your company fit in the world, where is it going, what opportunities do you have, who is around who can help and what can you do next that is within your capacity to do right away? Developing a good plan enables you to see the forest and the trees.
Failure is easy… Look for an excuse everyone will believe, quietly close up shop, put your tail between your legs and slink away. No problem. People do that every day. (As a veteran, I’m sure that’s not your style!) Nevertheless, the real problem surfaces when there is a lot of money on the table. Your work has paid off; orders are piling up you and have a rapidly growing company on your hands. I call this a “high-class problem.” Believe it or not, this is often where many companies fall apart. With a good plan in place, you will already have an efficient structure in place, and your next moves will likely be the right ones.
Have you ever started your car only to discover that one of your sparkplug wires is disconnected? Even a perfectly good V8 runs like crap if just one cylinder isn’t firing properly. It’s not like the remaining 7 cylinders will still get you going — barely — it’s as if the entire engine is almost worthless even if just one plug wire is disconnected. Likewise, it can take just one employee, who either just doesn’t get it or just isn’t with the program to mess everything up. It is vitally important all of your people see and understand the big picture. I recommend having them contribute part of the plan themselves — they’ll see the big picture as well as design in their part to make it work. A good planning system enables collaboration and provides ideas each person can adopt as their own.
Tom Sawyer got the other kids in his neighborhood to paint that fence. I’ve been in those meetings where everyone is going in different directions, their noses in everyone else’s business, but their own. Collaboration on a business plan is their opportunity to design what they will do as well as review what everyone else has designed for themselves to do. You no longer need to be the center of “tension.” The plan is. You are the team leader making sure that all the parts move together and that all spark plugs wires are connected. With a good business plan in place, the right hands know what the left hands are doing, making your management job easier.
Ever have a day when you ask yourself if this business is even worth going on with? (I’ve had this feeling more than once myself.) You may be surprised to discover that if you were to tweak one area of your company, many things could change. A brief top-down calculation may show you exactly where you are off and what, if you were where you would like to be, that would look like. You would also have some straight-forward logic to share with those whose job it is to make the improvements. You may also be surprised to [re]discover the true potential of your business and rekindle your enthusiasm to go on. Having a good business plan provides a tremendous sense of relief that you are on the right path.
“The same thinking that got you into trouble will not get you out of trouble.”
– Albert Einstein
It’s easy to get caught up in all of the details and emergencies with running your business. You must look at your situation differently. If this were someone else’s company, could you fix it? You probably could. What if you could step away from some of the emotional attachment and systematically compare each component of your business with a structure that includes a variety of ideas cross-pollinated from many industries? No blanks to fill in, just ideas to choose from and customize. These may also trigger many ideas from everyone involved. Implementing one’s own idea is a lot of fun and very motivating—as you well know. With a good business planning process, you could harness this power within everyone who works with you.
“The plan is nothing, planning is everything.”
~ Dwight D. Eisenhower
If it were more difficult to go through the business planning process than to just go on with your business, no one would ever do it. As you will discover, the business planning process is worthwhile. Plus, you will produce a document you can use much like a composer uses sheet music — every musician can see exactly how to play their part. Of course, we have an elegant solution to help you through the planning process and to develop a comprehensive business plan for your business.
You can learn more about that here.
Author: Burke Franklin