Your Business Plan: Dust Collector or Growth Springboard
Jun 1, 2018
Once upon a time, you had to sit down and write out your story and plan for your business.
They called it a “business plan.” Perhaps it was requested by your banker, or an advisor that was helping you start your business asked you to provide one, or maybe even because you heard that you have to have one but didn’t really know why. So, you searched the internet, found a template and filled in the blanks. It met the need and then you were done. Or were you?
According to Wikipedia, “A business plan is a formal statement of business goals, reasons why they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.” If that sounds like it is a “do it one time and you are done” type scenario, then that must mean that you are guaranteed to achieve your goals, and when that happens, your business is done. That hardly makes any sense.
There is a statement that is quoted fairly often in business and in life that says, “If you fail to plan, you plan to fail.” Ouch. But it is a sobering reality in business. No one goes into business with the intent to fail, so why not chart your course? That’s exactly what a good business plan does – it ensures that you are thinking about where you want to go and how you plan to get there. It’s a way to capture what’s happening in your business and industry. It’s a way to make sure you think about your competitive landscape. It’s your road map for decision making on new opportunities. And when done right, it’s a living, breathing part of your business that is reviewed and updated throughout the course of the year.
Sounds like too much work and you don’t have time? Well, think again. Imagine you were going on a trip to a place you have never been before, in a state to which you haven’t visited either. Would you just jump in your car, point it in that direction and start driving? How would you know what turns to take? Or how long it would take to get there? Will you run into road construction? How about toll roads? At minimum, you would probably want a map. This is exactly what I’m talking about. A business plan is to your business, what a map is to your road trip!
Some companies require large & extensive plans due to the nature of what they do, the scale of their business, the goals they are working to achieve, and more. But it can also be fairly simple. It’s the content of your plan that is important, not the number of words and pages. At its core, a business plan guides your actions and decisions and provides a basis for decision making. So, let’s dive into what we believe are the most critical components of a solid business plan.
- Basic info about the company - what is the purpose for your company? Why do you exist? What is your mission and core values? These are things that guide you to stay in alignment with your vision and passion for why you started in the first place.
- What are your competitive advantages? These are not things like “customer service, employees, or superior product.” If anyone else can claim the same thing, it is not a competitive advantage. You have to dig deeper. What is something that you do that is different or better than competitive offerings?
- What is your “hedgehog”? If you have never read “Good to Great” by Jim Collins, I highly recommend it. The hedgehog concept will help you determine the sweet spot for creating strategy for your business. In the most basic understanding, it is the intersection of what your company can be the best at, what you are deeply passionate about, and what drives your economic engine.
- SWOT analysis – Take some time to write down what are your Strengths and Weaknesses – these are internal to the company. Then write down your Opportunities and Threats – these are external to the company, such as competition, regulations, etc. How do these impact your plans? Are any of them things that you want to change? Maybe they become a goal within your plan.
- What are your goals? Start with the big goal – what do you want to be in 10-30 years? Based on that, what are 3 objectives you need to accomplish in the next 3 years? Then, take those 3 objectives and break them down into goals for just this year. And finally, break those down into quarterly priorities. Then, during each quarter, review how you are doing – are you accomplishing your goals, or have there been any changes that require you to course correct within your plan?
There are so many more things that you can do, but the important thing is that you do it. If you just answer these basic questions and set a few key objectives to track, you will have a plan and be able to influence where you are going. Without this plan, you will undoubtedly be blindsided and miss out on opportunities that you simply overlooked. All it takes is a pen and one sheet of paper to get started. Once you get in the habit of following your map, you will be amazed at what you see and learn about your business and how it guides you to achieve your goals.