Business plan, annual waste of time or essential for your business

The minute you mention "business plan" to anyone 9 times out of 10 the reply is a loud groan or a shake of the head. Many think it is "only" essential when you are trying to secure external funding, whatever type of external funding that comes to mind (from bank loan to venture capital).

Every business template I've come across (and there are many organisations/institutes that can provide you with a free template) has the same structure you are deemed to follow and the explanation of some parts confirms that a business plan is "only" essential when looking for funding:

1. Summary
(Enter your text here)

The summary is the last part of the plan that you write, but should be included at the beginning of the plan. This allows busy readers to quickly see what the plan is about without reading all the details.

(copied from a standard business plan template offered by one of the large banks).

Specially the part of "busy readers" shows it to be more an external focussed plan than for internal use. The biggest problem or even largest pitfall for this is writing to please/seduce that external source instead of being a honest presentation of past, present and planned future. Don't fool yourself, we've all done it. Even if you write such a plan only for your accountant or bank manager we tend to write it in the most optimistic way we think we can get away with. So who's fooling who?

 No wonder then that so many (annual) business plans end up in the archives once written, stacked on top of the plans from last year, the year before and so on. Where in fact it should be an ongoing (rolling) report/assessment of where your business is now and where you want to take it.

This month's free download at the Director's Centre Business Club is all about "Where do you want to go?".

"If you are able to start to define where you want to be and what you want to be, then you are also starting to define what it is that you do not want to be. This process of defining the direction that you wish to move in makes it easier to decide what the steps on the way will need to be.

The more focus you have, the greater your clarity, then the easier it is for you to define the path. If you do not know where you want to go then any road will do!
While many consultants get very excited about the definitions of purpose, vision, mission, objectives and goals, what really counts is how you can use the process to define and determine the future development of your business."

It contains one of my all time favourite remarks: if you don't know where you want to go, any road will do.

You have to know/find out/discover where you want to take your business. You, not your bank manager, the venture capitalist or anyone else. You are in the driving seat and it all starts with focus. And focus is better "captured" and sustained when you write your goal/aim/plan down - in your own words, comprehensible for you and not just for your external sources - and once it is written down this way it becomes more real and achievable.

You can register for the Director's Centre Business Club still for free, just start here (the first page tells you it is indeed for free and no credit card details will be asked, then on page 2 you are asked to fill in your business details).

Once you've registered find this month special workbook. That's right: a WORKbook, not just something you should only download and read, but work on/with it to grow your business. Does this replace the annual business plan? Perhaps in more ways than one.

Using the workbook you'll have to come clean for yourself, it makes you think hard and long if you are on the "right track" of what you set out to do when you started your business and how you want to proceed. Once you know/realise this, the road is clear to plot/plan your own and your business' future in sustainable steps. (And the same applies for when you are "only" just thinking of setting out to start your own business.)

And believe me, if you know deep down in your heart that the steps of this plan you write down are honest, of your own making and sustainable, it will become so much easier to convince external sources if in the event you are indeed looking for external funding. Now that's what I would call a plan to do/stay-in business, the only business plan worth your time.

(This article/pondering came about after a discussion on a DIY-forum - of all places!)

Comments

[Scott Ringlein]

For certain this is not a waste of time. Every business needs a roaqd map and the Business Plan, long or short, is the best tool to document where you are going!

[Karin H.]

Hi Scott

And which method what you say would suit (new) businesses best who are not looking for external funding? The bank's template or the Director's Centre approach?

Karin H

[Scott Ringlein]

Karin,

Thank you for your interest and contacting me!

A traditional style Business Plan would be utilized but the content would be structured into a Business Mission Strategic Plan with less focus on those items that an External Funding entity would be looking for.

I take my clients through a simple 5 step process in which we develop a fact based business plan that communicates the 5 W's of their business to the people that matter most.

As stated, a good business plan is critical to your businesses success.

You can follow my weekly Business Planning Blog here http://scottringlein-thebusinessplanner.blogspot.com/

If you would like to discuss further and are interested in my services, please contact me.

Best of luck and have a super day!

Scott Ringlein
Founder & CEO
PM Solutions, LLC - "The Business Planners"
Strategic Business Planning and Coaching
SRinglein@Yahoo.com
+1 313-815-1141

[Karin H.]

Hi Scott

Thanks for your elaborating on this. As for W's: we've created a whole webpage on this: Who we are, Where we come from and Why we do What we do the Way we do it ;-)
That page communicates our principles to the most important people that matter to us: prospects and clients.

Thank for you also for your offer for further discussion, however, we feel/know we are in very good hands with our own dear friend Richard (known to some as "the good doctor") at BizRichard, who makes darn sure we keep our rolling "business plan" up to date.

Karin H