What typically comes to mind when you read or hear the phrase "business plan"?
For many people, the mental image is a big boring formal document. It's like a high-school term paper or a university thesis, a daunting task to be finished with a huge sigh of relief, then stored away in a drawer and quickly forgotten.
That's why many young people say, "Don't bother to plan." And if you ask successful entrepreneurs whether they had a business plan to start, many will say they didn't simply because it's cool to say no. It's sort of like asking people whether they studied in high school.
But probe further, and you'll find that many people who suggest bypassing a business plan will recommend that you set strategy, goals and priorities and follow up with frequent course corrections. Which, of course, is business planning. It just doesn't sound like the popular image of a business plan.
Smart entrepreneurs develop a streamlined plan--straight to the point, but built to be managed and changed. Form should follow function. If you don't need to show a document to investors, bankers or other outsiders, why even bother to print anything out? Keep the plan simple and easy to deal with--an electronic PDF that you review and revise at least once a month. It should set forth your strategic focus, target market and point of differentiation, as well as specific steps to implement your strategy, including assumptions, tasks, milestones, responsibilities, dates, deadlines and key measurements.
Now that we've laid out what to do, we ought to find a better way to refer to the planning needed to start, run and expand a business. Should we call it "business management" maybe? Or even better, how about "Steering the business"? I've asked about this wording problem on Twitter and in my blog, but I'm afraid nobody has come up with a suggestion that grabs me.
I have been playing off a post on Amex OPEN forum by Ivana Taylor, under the title, A New And Improved Goal Setting Process For Your Business (And Life). She's writing about business planning, and I think she gets it right with the idea of establishing goals. So instead of "business planning," maybe "goal management"? Or "goal keeping"?
Further suggestions are welcome in the comments section below, or @timberry on Twitter or through the contact page on my blog.
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Comments:
My experience is that people do not want to create a business plan because they do not want to be tied down, they are entrepreneurs after all. I always explain it is helpful to have a plan, but it is intended to be a fluid document and act as a guideline, not a hard and fast rule.
I like the idea of a business 'manifesto' - that gives the impression much better that the plan is about how the business does business.
Hi this an interesting article. The topic discussed in the article is very appealing. Will check back later for more of your articles. Few businesses would leave that kind of money on the table. But in reality, the very businesses that could benefit the most are the least likely to take advantage of the credit or benefit from it.
Many clients I've had don't understand the "why" of business planning - the benefits and impact of continuously improving strategies and implementation. I agree that the form in which the plan is presented to external users needs to be distinguished from the process used to manage the business.
We figured this out years ago, that's why we reinvented the business plan into a planning tool and reporting system on the cloud, using an easy multiple choice format where you can bench mark your steps and accomplishments and share them with your partners, mentors, coaches, investors and lenders. And because its on the cloud you can keep it current for the everyday changes most businesses make. And we do call it something else, it's called the Fundingroadmap dot com
We figured this out years ago, that's why we reinvented the business plan into a planning tool and reporting system on the cloud, using an easy multiple choice format where you can bench mark your steps and accomplishments and share them with your partners, mentors, coaches, investors and lenders. And because its on the cloud you can keep it current for the everyday changes most businesses make. And we do call it something else, it's called the Funding Roadmap http://fundingroadmap.com
I can identify with that client of your. It isn't that one is not educated and can't get one's ideas across when talking with friends or family but after you've seen some other business plans before and read what the description of the term business plan is it could make the task very daunting. This shouldn't take away the importance of careful planning and research but this article goes a long way to encourage people with low budget but great ideas start small and confidently and expand gradually as they go along.
Exactly the thing. As per me best thing is the business goal instead of planning. If one has set the goal at which high the firm want to reach and how many steps the firm wants to go ahead in particular year. Then by working on this strategy any can get the best results instead of the results those are with the planning! Thanks for such nice article.
Yes naming conventions can be a problem. Give it a name and people 'know what that means' - even when they don't. But a name is handy for isolating keywords to use for people to find you, if you help in that area. Some conundrum huh? The good news is that some realise that even though they have a good idea for building a business, articulating that idea in a way that others can understand it is a different beast. Recently I was contacted by a client for that purpose. He was a very clear and detailed concept that he wants to create, but recognises that he doesn't have the skills to capture that in a written format and wants to get that done so he can use it to foster support from suppliers and others who will help him to achieve his aims and also to clarify his order of priorities and to keep him focused. Would that more businesses were run by people who understood the value in this. I have no doubt that there would be fewer going bust if this were so.
Business plans are very intimidating to entrepreneurs, especially those who are taking their first entrepreneurship plunge. Thinking of it as "something else" is not a bad idea at all, Tim. That certainly beats not having one at all in some form! And not having a plan, as we all know, can be the downfall of a lot of new businesses.
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Great post! It's like...you know you should eat more vegetables. You know you should put a business plan together. Just doesn't sound sexy enough. The important part is moving thought form to reality...and that's what a written plan does. From dream to reality Maybe...Manifesto? :) xo$, Ellen Rohr
It is an interesting post to read. Good points have been mentioned. Thanks for sharing.
If your company is ABC, just call it ABC Business System. A business plan by any other name is still a business plan and that is something you can't do without.
How about calling it your GPS (goals,prioties and strategy) sounds approiate to me. Bip.UK
Hi Tim! I like to think of my business plan as a "Success Plan". It's not a traditional, detailed plan either. It's concise and very focused. Being a young entrepreneur, I totally agree with your comments about the idea of a "business plan" being too daunting for young, and impatient entrepreneurs (like me).
I write about entrepreneurs for a living and very few of them have written formal business plans. One woman I interviewed recently said she basically just made a list of what needed to be done. I really like that way of doing it.