Business Planning for the Rest of Us
Enter the Project Grow Challenge presented by Entrepreneur and Canon USA for a chance to win up to $25,000 in funding for your business. Deadline is Sept. 15 2015. Click here to enter.
So let's say you don't need a business plan. You say your understanding has always been that business plans are for starting companies. Or maybe because you're not looking to take your existing company to market, borrow money from a bank, sell it or get new investment, you don't need a plan. Those are myths, and they don't really argue against business planning. But let's suspend disbelief for a bit and settle for this question: If I don't need a business plan, do I not want to plan my business?
Here are some reasons to have a plan, regardless of whether or not you need to show one to some outsider:
- Long-term goals: You want to manage, develop, review and implement long-term business strategy.
- Business management: You need to manage teams, tasks and accountability. The problem of who does what, when and how much it costs comes up again and again. Responsibility has to be defined. All of this needs to be written down. You need to know what's going to happen. You need to coordinate between people, vendors, events and so on.
- Cash-flow management: You need to manage money. You have to watch sales to be able to manage expenses and, more important, cash flow. You don't need any surprises.
- Staying strong: You want to keep your business healthy. That means watching for new opportunities, threats and new developments in your market. You don't want to stagnate.
All of these goals are related to business planning. None of them, however, relates directly to the classic business plan document. They don't involve validating your market or showing off your management team. Nor do they involve valuing your company for investment or proving your company to bankers.
They are about managing the company, not explaining it.
My suggestion: Don't throw out the baby with the bathwater. Do your planning, whether or not you develop a full, formal business plan. Do just what's necessary, not what the formal business plan would involve.
But what is it, then? Where is it, how do you do it, how do you share it? Here are my recommendations:
- Assume the plan will live on your computer. Don't worry about printing it out.
- If you're more than one person in your business, get the others involved. If you're a lot of people, then get the important managers involved. Share the planning process. Do a SWOT (strengths, weaknesses, opportunities, threats) analysis . Set up a schedule for review meetings for comparing plan vs. actual results and making course correction.
- Define your strategy in simple bullet points, perhaps pictures. Identify what's special and different about your business--a focused target market, and what you're offering to solve somebody's problems. Include the SWOT. Don't worry about format or tools or software; do whatever works best for you.
- Set up a list of dates and deadlines and decide who does what. Determine what is supposed to happen to make that strategy happen.
- Run some basic numbers: sales forecast and expense budget.
You don't have to stop life, even temporarily. Don't wait for the big plan to be done. Get going. Put your plan together one piece at a time, on your own schedule, and keep it somewhere easily accessible. Before you know it, you'll be planning to manage your business.