Planning, Startups, Stories


Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

Business Planning Isn’t About Pages 11

Somebody asked me about a one-page business plan. That’s a fashionable idea, and can certainly be a useful exercise. I’ve written in this space how a one-minute elevator speech, for example, can be a useful exercise. And obviously a pitch deck and a pitch presentation can be useful too.

Summary is good. Everybody should be able to summarize their career in a single page, and everybody should be able to summarize their business plan in a single page too.

But that one-page summary isn’t a plan, it’s a summary. You might use it to communicate a plan on high level. It may be useful, but it doesn’t replace planning.

And for the record, that 10-page business plan, or the 20-page or 50-page business plan, those aren’t plans either: they’re output. They are a snapshot of what the plan was at one time. By the time you’ve printed them out, if there’s good planning going on, they are already out of date.

So what’s planning? it’s a process that starts with a plan and continues with regular review and revision. It’s a combination of strategy, review process, assumptions, dates, deadlines, responsibilities, metrics, accountability, and management. It helps you steer your company.

It’s not one page, or 10, 20, or 50. It’s what’s going to happen, when, why, who, and how much.

  • http://www.broshegroup.com/ Luis Salvador

    This is so true Tim! I agree with this. You point it out very well and thanks for broaden the ideas of your readers, especially me, your new reader. From the word itself, planning. It also has to consists with a lot of mind for the plan and discuss about the pros and cons and other possibilities. Great job here!

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  • Yuvarajah

    I am a retired soldier and since joining corporate HR in two companies (one private and another public) I am yet to see the light of a business plan. The funny thing is I have even helped facilitate a strategic business planning session. Yet, in the end, nothing much happened!. There was no blueprint roadmap to communicate, review and re-plan. Yet, come year end, the CEO calls for Heads only meeting to go through the financial figures. Yet, for some reason business survives and people go about doing their job, “as usual”, without a clue into what they have missed out!.

    Then one day in 2009, I decided to go on the “attack” by enrolling some key Heads for Balance Scorecard training. We brainstormed and came out with a ONE page Strategic Roadmap. When we got the Operational head to sell it to the CEO he sid, “people are not ready”.

    None so blind as the ones who don’t want to vision and none so deaf as the ones who don’t want to listen. I would still settle for half a good one page than none at all.

  • http://www.businessplanexecutivesummary.com/ Adam Hoeksema

    Tim,

    Thanks for the response to my question. I do agree that there might be some danger in too much automation in financial projections. I thought your comment, “add human judgment in meaningful, manageable assumptions.” was key.

    I am young, but the entrepreneurs that I see through my work at a technology based business incubator really struggle with meaningful assumptions. I RARELY see a set of financial projections where the entrepreneur is not a millionaire by year 3 haha. My take on it is that the average entrepreneur projects far too optimistically, and maybe some data driven automation could actually help bring them back down to earth. Anyway, thanks for the response. Have a good night.

  • http://www.trainofthoughts.ca/blog Tim Redpath

    Thanks Tim,
    I’ve always hated it when companies go through these annual planning cycles, do the big SWOT analysis with a wall full of stickies, create a business plan and then put it in a binder where it slowly gathers dust.

    Big or small, business plans are like a roadmap. You should know where you’re going without looking at it all the time; but you need to refer to it from time-to-time to make sure you are going in the right direction and will get there on time.

    Just a thought
    Tim

  • http://growingforward.net Scott Asai

    Simple is better. It’s not about how smart/important you are, it’s whether someone reading it can understand it. Realistically it’s going to change once you finish it anyways, so don’t overstress on it.

  • http://businessplanexecutivesummary.com Adam Hoeksema

    Tim,

    I probably just need to read your book “Plan as you go” or look back through all of your blog posts, but do you have a concise explanation of how you think the entrepreneur should “business plan”?

    If you say that a 10, 20, or 50 page business plan is out of date the minute it comes off the presses (which I absolutely agree with), then what should the entrepreneur do instead? Again, maybe I need to take a close look at your business plan software, but it seems to me that there should be a business plan that integrates with things like your Quickbooks account, Google Analytics Account, maybe even your Facebook account to constantly pull in the latest data about your business so that you don’t constantly have to manually update the plan.

    Although I think financial projections are difficult, the growth rate and data from all of these accounts might allow you to create automated financial projections based on historic numbers. Everything is automated…

    Is that valuable to the entrepreneur in your opinion?

    • http://timberry.com Tim Berry

      Hi Adam, glad to see you here, and I’d like to think my last two paragraphs in this post are a concise explanation. Yes, as you suggest, there is a lot more in The Plan-As-You-Go Business Plan — which is posted on the web, complete, at http://planasyougo.com — and on this blog. Check out the business planning category here, for example. I’m saying that form follows function, so that it doesn’t matter what format or what the output looks like, as long as you have planning as management, steering the business. Yes, as you suggest, projections are important, because they help you manage better; and yes, setting metrics and then tracking results is also very important too.

      Regarded automated projections, I do think the financial tables — sales, costs, and expenses linked into projected profit or loss, balance, and cash flow — are vital, and should link together, but I mistrust automating the future from the past. I say put the financials together so that they link according to mathematical and financial principles, and then add human judgment in meaningful, manageable assumptions.

      Thanks for your comment, Tim

  • http://www.trudyphillips.com Trudy

    In counseling people seeking to start their first business, I find that helping them complete a one page business is a useful tool. Over the years, I have seen plan not done due to the fear of having to write many pages. The one page helps them focus in their thinking on their vision, goals, strategies and planning. It is a tool that moves them forward.

    • http://timberry.com Tim Berry

      Trudy, agreed, and I say that in the post too … but I do have a problem when that one useful tool, which is a simple summary, is confused with business planning. If you just called it a summary, instead of a business plan, I’d feel a lot better about it. Tim

  • http://www.ivanwalsh.com Ivan Walsh

    Hi Tim,

    …It helps you steer your company. That’s it.

    Your business plan should serve as a metronome for your business activities… and adjusted when circumstances change.

    Regards,

    Ivan

    • http://timberry.com Tim Berry

      Ivan, thanks, and good to see you here.