At the Food for Profit workshop last week, I talked about researching and writing a business plan (as opposed to the "mental plan" for which many entrepreneurs settle). After listening to me for a number of minutes, one of the participants asked: "How long should you plan? Couldn't trying to create "the perfect, complete plan" keep you from ever starting your business?" What a good question!
|Planning ahead is great - |
but you need to get off the ladder to live!
The SBA Blog Spot has a great article by Tim Berry, Founder and Chairman of Palo Alto Software and bplans.com that addresses this very subject. Mr. Berry says that the assumptions in our plans can change very quickly in today's world, so we should see a business plan as a tool that we manage while running the business. He suggests the following steps:
First, do a plan that has concrete specifics you can track. Include not just the obvious numbers for sales, costs, and expenses, but also other manageable numbers like web traffic, visits, leads, presentations, calls, downloads, likes, mentions, updates, and whatever else drives your business.
Second, set a regular schedule for reviewing plan vs. actual results. Have a monthly task to look at progress and identify problems.
Third, learn to distinguish problems of execution from changed assumptions. If assumptions have changed, then the plan should change.... Usually, unexpectedly good results are a good reason to look at shifting resources towards the positive; unexpectedly bad results are a good reason to shift resources to correct a problem.
So, should you have a plan? Yes - absolutely. Should business planning BE your venture? Not at all! To do that would be similar to opening the promotional materials for a cruise, reading them, looking at the pictures and saying "Now I've been to the Bahamas!" If we really wanted to see the Bahamas, we'd read the literature, talk to others who have visited there, contact a travel agent, and get a great wardrobe to wear on-ship as preliminaries - the point is to get on the boat! And, having taken the trip, consider what you'd do differently in future trips. In much the same way, business planning is not the end, but only a means, to a great (ad)venture.