Essentials for success: a business plan

It has been said that the typical small business owner would never consider taking a family vacation without first carefully planning dates of departure and arrival, obtaining hotel reservations, reserving tickets in advance for hard-to-get events and carefully laying out what to pack.

But when it comes to their business, they essentially operate every day with little to no preparation other than showing up to work and taking on whatever the day offers. That same small business owner will lament that everything in the business is not getting done that needs to get done, that there are not enough hours in the day to do everything, and the company does not seem to be “going anywhere.”

For those of you in this category, I offer a solution. Consider with me for this and the next three columns the logic of building a written plan of action, or a basic business plan. I offer you a simplified, basic approach that will yield you amazing and positive results.

It has also been said that life can be summed up as a series of habits, occasionally broken by thought. I argue that for a lot of us this applies to how we run our businesses and conduct our daily operations.

We continue the habits of the past, ingrained in us from doing the same thing over and over, day after day, sometimes because that habit was passed down from generation to generation. Some of these habits may be good to continue, but many may have outlived their usefulness, and yet others have become a nonproductive use of resources.

I suggest that many of the habits in your business today actually hinder progress toward higher profit and value creation.

I want to help you examine all of your important business habits, create a process to shed the ones that get in your way, and help you add new habits that will increase profits and productivity. Along the way, this process will unleash energy within the business that will move toward the goals you desire.

Getting started

Dozens of books have been written on the importance of having a business plan, and thousands of consultants across the country get paid to help businesses of all sizes develop business plans. For those who feel that all of this may be too overwhelming, especially with limited resources of time, money and experience, I am going to break the business planning model down to the fundamentals as I see them.

Some basic rules:

• Limit the amount of time spent on the plan and set a date to finish. How about 30-45 days?
• The plan must be written; otherwise, how can you keep score?
• Involve others. Allowing others into the process will improve the quality of your plan and foster buy-in from members of your team
• Keep it short. Use bullet point language, not lengthy paragraphs. Focus on the essentials, not the tiny details.
• Be honest with yourself on assessments. Otherwise, the rest of your work will be wasted.
• Don’t ignore weaknesses. Face them square on and don’t make excuses for yourself.
• Write this plan first for yourself and your team. Make it your “road map to success.” Then plan to share it with other external audiences, such as bankers and vendors

The professionals and authors on this subject will offer many sophisticated steps and sections that should go into a business plan. But because we are all beginners here, I will break down the components and major parts of the plan that you will need to address.

Others may disagree, but I think about the key components of the business planning process in terms of the follow three steps, in order:

Take Stock of your Company – This is more than inventorying parts and appliances. This is a realistic assessment of the marketplace, the customer base and the resources at your disposal. This is a big honesty part of the process. Next month’s column will offer suggestions as to how to do this, and prepare for the next step, which is:

Set Your Goals – Here’s a famous quotation from Alice in Wonderland:

“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to,” said the Cat.

“I don’t much care where,” said Alice.

“Then it doesn’t matter which way you go,” said the Cat.

We will help you think about basic, simple goals that can be set and achieved, based on your decisions as to where you want the company to go.

Create the Steps – These will take you from #1 to #2 above. We will keep it simple, and achievable.

It you decide to follow this very basic yett structurally sound process, I promise you the following will happen:

You will see your business in a much clearer light than before.

You will force yourself to examine habits that need to be changed or eliminated; You will create a new focus for yourself and your management team; and Your business will begin to move in the direction you desire.

If these steps become an annual habit, I assure you, your business value will increase solidly this year. Look for more information on business planning in the next three articles.