(Note: I posted this yesterday as a guest post on Howard Lewinter’s Talk Business With Howard blog, part of getting ready for a radio chat with Howard on Blogtalkradio tomorrow morning. It starts at 8 am Pacific time. Please click here to listen or get more info on that.)
Is this you? When asked if you have a business plan, would you scoff slightly, roll your eyes maybe a bit, and dismiss the idea as something only startups do. Would you say “we’re not a startup,” or maybe, “we’re not seeking investment,” as if this makes it obvious that you don’t have a business plan.
If so, you’re not alone. And I say, emphatically in fact, that it’s a damn shame you’re not using planning, and planning process, to manage better. The myth of the business plan gets in the way of the benefits of real business planning.
What’s the myth? You already guessed it. They think of a business plan as a document, done once, surmounted like a hurdle, that some business need to produce to get a loan or get investment. They say it’s for startups. It’s hard to do. It’s about the text, and the editing, and the formatting. And nobody really uses it. And they think that rapid pace of change negates the value of planning.
And that myth gets in the way of the real benefits of business planning done right. By which I mean:
- It’s not a document, it’s a plan. The plan lays out what’s going to happen, why, who’s responsible, what dates and deadlines, and how much money comes in, and how much goes out.
- It lives on your computer, not on paper.
- Format doesn’t matter. Keep it in a format that works for you. I like the software my company publishes, obviously (look at www.businessplanpro.com or www.liveplan.com) but if you prefer your spreadsheet, word processor, or slide decks, or — better yet — a combination of the above. That works too. Keep it on a network where you can get to it every month.
- It’s a streamlined reminder of major priorities. Use it to keep you and your team mindful of what matters most.
- It gets reviewed and revised every month.
- It helps you manage change by connecting the relationships between tasks and costs and expenses and sales and people and goals.
- It sets objectives that can be measured, and then, for the monthly meetings, metrics are tracked and reviewed.
- Think of it as a way to manage change efficiently. As assumptions change, and results reveal reality, the plan adjusts.
- Think of it as a way to establish accountability. Tasks are assigned with target values, and results are tracked, and results then become management points.
- You don’t have to forecast correctly. We’re human. We don’t guess the future well. Just make sure the base your forecast on trackable assumptions, so you can deconstruct when actual results are different from plan. And they will be.
Myths are fine as stories that stand for something, windows into reality. Myths are bad when they interfere with optimizing your business.