There is a preponderance of Business Plans doomed for failure in the market place. Why is this? And what makes an Effective Plan? Here are some key areas to pay attention to when developing your business plan…
The Right Business Plan Process
There are a lot of business planning books in the market place which attempt to explain and quantify the Business Planning Process. Some even claim to be the most “Comprehensive”, “Final”, “End-All and Be-All” Business Planning book. Some are workbooks or software trying to take you step by step through the Business Planning Process. Many of these books have lots of great experience behind them and contain very useful information; yet, they lack in the actual execution of a good Business Plan or are way too in depth or technical for the entrepreneur to clearly understand.
Being someone who has been developing business plans for over twenty years, I only know one way to write an Effective Business Plan: from a Comprehensive, step by step process in a workbook, building block fashion. A good planning workbook is understandable, simple and addresses all business types and aspects in a step by step, progressive, building block process. Once this Process is complete, there is a simple outline or template to use to package your Business Plan per your particular uses. But a good business plan workbook doesn’t stop there, it also addresses the Plan’s Implementation, as no Plan is effective until it is implemented and part of your Company operations. Only then can success be consistently attained.
Strong Commitment and Involvement
The Business Planning Process, its use and implementation, must have the strong commitment and involvement of your Company’s Executives and Management. Effective business planning is a top-down, bottom-up process, yet needs the total commitment from the upper levels to ensure it encompasses the commitment of the entire company. Upper Management and Divisional Management must also be willing to use the Plan to manage operations. A Plan is not effective unless implemented and used through out a company. We suggest building your Company around the Business Plan Process so that it becomes interwoven into the fabric of your operations. It is a tool, use it. Key Management and Employees who are responsible for implementing the Plan should be actively involved in its development. It is important that the Business Plan Development involves all levels of a Company; otherwise, commitment to it will be perfunctory.
Realistic Short and Long Term Outlook
The Planning Process and its resulting Goals, Objectives, Tactics, Programs and Strategies should address the significant factors which affect a Company’s short and long term performance. Outlook is just that, a projection. Key influences to Company Performance are identified and developed into an Action Based Strategic Plan, which will in turn increase Growth, Revenues and Performance. One of the underlying Key concepts in a good planning is promoting a Process from the Product Level to the Marketing Level to the Strategic / Performance Level. The Strategic Tactics and Programs the Business Planning Process develops and produces is what will enhance Performance- not blind projections or just “thinking” you can exploit a market.
The Planning Process looks backwards for things you have learned along the way which can be applied and leveraged into future success. However, more importantly, the Planning Process must be Forward Looking, identifying trends, developments and opportunities in your marketplace and operating environment. Having a developed Process instilled into your Company’s operations will produce forward thinking results, ensuring you consistently have a Competitive Edge and the opportunity to be a market maker and, perhaps, a leader. A business going nowhere is one stuck in the past (i.e. past accomplishments) and the status quo, lacking a mechanism within the Company to produce solid forward thinking and predictable Growth.
Company-wide Performance Objectives
Your company’s Goals, Strategies and Performance Objectives should be consistent throughout your entire operation. The Plan should provide a clear picture of your Company’s direction to all your employees, as well as, customers, suppliers and strategic partners, regarding future Performance Goals. You can’t reach that goal without your people being behind the Process and Plan Implementation. Your Company needs to demonstrate strong Leadership and Accountability to your Markets, Customers, Partners and Suppliers by “owning” your future Performance Goals and Milestones. An Effective Business Plan, when implemented correctly, applies consistent Business Models to an ever changing market so that you can realistically achieve your Future Performance Objectives.
A Process that Constantly Assesses a Plan’s Assumptions
If Key assumptions underlying your Business Plan prove to be invalid, an Effective Plan provides specific contingency planning systems and processes to indicate clear courses of action. An Effective Planning Process helps you to address significant deficiencies upfront and puts contingent, systematic plans in place to minimize a company’s learning curve severity, while effectively exploiting a changing marketplace. Uncertainty and unexpected change are a guarantee in business. An effective plan has well developed systems and processes in place to adeptly manage those surprise events, turning a potentially costly experience into a profitable opportunity. Through a solid business plan process, you will design and install a Company Structure which can develop an effective and competitive Product or Service. This Product or Service will be exploited via a well developed Marketing Plan and successfully implemented into a winning Strategic Plan, producing expected, realistic, attainable Financial Goals.
Comprehensive and Specific Purpose Business Plans
An effectively developed Comprehensive and Internal Business Plan lays the solid foundation toward successful attainment of needed Financial Resources through an adapted, External Funding Business Plan. Effectiveness starts with the Comprehensive (Internal) Plan, culminating in the viability of various External Business Plans – i.e. Plans for Funding, Customers, Suppliers, Markets, Regulatory purposes, etc. A good business plan workbook provides a step by step Process which will produce the Global Plan to successfully run your business. Other External, Ancillary Plans become a snap to “package” from the Global Plan. It is hard to develop an Effective External Plan without having the foundation of the Comprehensive Internal Plan built.