Monday, December 4, 2023

Business Planning Is IMPORTANT And It Has Been BROKEN

Business Planning has been broken by those who position it as having to be anything from twenty-five to fifty pages in length. Who are they? They are government agencies that purport to support small business, commercial bankers (small business bankers rarely ask for a business plan anymore) who need a business plan to assess your company’s financial request, consultants who want to write the business plan for you, and accountants who want to generate cash flows for you.

None of these business plan sources, or the business plan formats they recommend, help you to be a better, smarter, and more focused business owner.

What’s broken with this approach?

  • The business plan will be their interpretation of what your business can/will become
  • It’s a story, not a business plan
  • It costs too much because it has to be big
  • It’s prepared for the wrong audience.  You are the audience of your Business Plan
  • It will end up in your credenza/computer file collecting dust because it has no relevance to you, it cost too much and it didn’t get you what you thought it should

I feel you nodding your head in agreement.

I’ve learned over my career as a management consultant that the real measure of a business leader’s character is their ability to be focused on the success factors for their business, measuring the business against those success factors and having some form of consistent and sustainable business plan that aligns and holds them/their team accountable to the delivery of the success factors.

Business Planning is IMPORTANT!

There are five reasons why you should consider business planning, not only as important, but as an absolute critical management activity.

1)  Clarify and achieve the future you believe in

Would you not want to clarify and achieve the future you believe in? If I tell you that, with just the completion of a Vision Statement, I have seen the future of a business become clearer, richer, more focused, and more compelling, would you not want to share in that experience too?

2)  Make better quality decisions

There is nothing radical with the idea that a business owner will make better quality decisions in a planned environment.

3)  Identify and focus on the major few, not the many minor priorities

Perhaps this benefit of business planning is similar to making better quality business decisions above, but we, as business owners, spend too much time below the important horizontal line, doing at worst, completely unproductive activities, or at best, fire fighting.  In a typical time management graph with axis of Important and Urgent, you can’t work above the important horizontal line without defining what is important to your business. Strategies and Action Plans? You don’t know these things on the fly; they have to be carefully considered. You need a planning process to identify them, connect to them, and hold yourself accountable to implement them.

Moreover, when you do get pulled off track (and we all have and we all will continue to be), we need a planning process to bring us quickly back to the activities that truly matter and will make a difference.

4)  Be a great strategist as well as a great tactician

As business owners we are all great tacticians, which we have learned from the day-to-day operation of our business. From the long, hard hours we spend in the Urgent/Unimportant time management quadrant doing our fire fighting, we learn how to fix things, and fix them again, and again and again.

Great strategist? Not so much. In fact, most business owners I meet don’t even know what a strategy is. Why would they? Very few of them have been in the role of Vice President, Senior Vice President, Executive Vice President, President, or CEO in a large corporate organization. The job description of those kinds of roles is rarely about tactics. They are 80% about strategy. They are about developing strategies for front-line staff to tactically engage in.

Being a great strategist is critical because it is through the development of strategies that you can truly differentiate yourself from your competitors and earn ever increasing revenues even in challenging economic times.

5)  Build a business based on continuous improvement

What is the relationship between the expression ‘status quo’ and ‘business success’?

The answer is—there is no relationship. They are mutually exclusive. You can’t achieve status quo with your business and continue to be successful. If you are doing the same old same old and achieving the same results, your business is already in decline. You just don’t know it yet. Your competitors are coming after you. The outcome of their continuous improvement initiatives just haven’t shown up in your market share yet. But they will.

Engage in business planning and therefore continuous improvement through strategic development and implementation and you will win market share and experience greater financial success through focus on the right activities.

So Business Planning is IMPORTANT but it has been BROKEN. It can be EASY, FAST, SUSTAINABLE and therefore entirely PRACTICALto any business.Youjust need to source the right Business Planning solution.

When you change your mindset about Business Planning and align to this kind of thinking you will create a SYNERGY between you, the Business Owner, your Business and your Business Plan.  If you imagineYOU, your  BUSINESS and your BUSINESS PLAN as 3-interesecting circles then the area where all 3-circles intersect…well that’s just the Vision you have for your business coming true!


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