FROM THE BULL || Some people love writing business plans and others hate it. Some businesses have (astonishingly) never even written one instead preferring to react to events as they occur. I neither love writing them nor hate it – to me it’s just a necessary part of business. A good plan is invaluable. It helps to map the path forward and anticipate things that might go wrong along the way. Essentially it puts rigour around the age old adage of expecting the best but planning for the worst.
Over the years I have prepared and/or reviewed too many business plans to count. I have seen a handful of great ones and others that should never have been written. Many of the latter were written to satisfy other stakeholders but then sit idly on a shelf. The best business plans are short (2-3 pages), realistic, constantly referred to, and contain a list of steps and actions that will move the business towards its longer terms goals. They are also shared with and understood by everyone in the business.
A core part of the plan is an analysis of the “impediments to success” – that is, the things that could get in the way of achieving the listed goals. This is central to effective business planning. It’s easy to write down some lofty goals but knowing what stands in the way can be just as important. In my own experience I spend around 50% of my business planning time working on understanding the impediments and then figuring out how to mitigate them. I do this in advance and most of the time these circumstances never occur. When they do I’m ready to act immediately. I hate surprises in business and this is how I minimise them occurring.
18 months ago the head of a company that I had been involved with called me up to have a look at his business plan. He was very proud of it. The plan was 60 pages long with all manner of colour charts, tables and financial logs. It was an impressive document, at least aesthetically. However it was useless as a business planning tool. The reason was that the document was rarely referred to by the management team or anyone else. It sat on the shelf. It had been prepared because it was on the company’s annual “to do“ list. The problem was that the plan was not based in reality, there was no mention of success impediments and nobody in the business believed it was achievable. The care factor was alarmingly low. The business was ignoring the plan and was operating in day to day mode and its results reflected this.
Over the course of 2 days we pulled the 60 page plan apart and ended up with a meaningful document of just 3 pages. We involved as many staff as we could in the process which helped with getting buy-in. Recently I visited the CEO again and he proudly showed me his plan for next year boasting that he had got it down to 2 pages. He also told me that the precision of the previous 3 page plan had focused the efforts of the business and resulted in (his words) “a surprising over-achievement versus our targets.”
Writing a short, precise business plan is very hard to do. It is much harder than writing a much longer document where you can get away with generalities and verbosity. A short plan focuses the collective minds in the business to decide which matters are the most important and which will create the greatest value.
Spending time in understanding the risks and opportunities for your business, via effective business planning, is a good investment. It can protect you against being run over by a bus you didn’t see coming or missing a fantastic opportunity because you were focused on minutia. That’s painful.
Expect the best but plan for the worst is a great mantra for business – it’s also a fundamental tenement of extreme planning…
Images of Dubai… they planned for the best, did they plan for the worst?