(As published in the Sunday Star Times and on Stuff.co.nz on May 21, 2017)
They say if you do not know where you are going, then wherever you end up will do. Most small to medium businesses operate this way. Even some large ones. Their business owners, leaders and senior team are too busy day to day inside the business and never take the time to consider what they might be and how to get there? Sound familiar?
I work with hundreds of businesses of all shapes and sizes every year and working through a business plan and doing the related strategic thinking is the first thing we start with in our focus on how to grow the profitability of a company and ensure long term success. I have kept a record over the past many years and less than 10% of these businesses had a business plan to start with. Isn’t that scary. It is the same as you driving to a new destination that you have vaguely heard of without really knowing where it is, and not planning out the route to get there. It might take you 30 minutes to get there, 2 hours, 6 hours or you may never get to your destination depending on what comes up on your journey and how good you are at heading in the right general direction by following your nose. This is literally how the normal business operates. No wonder most businesses never reach their full potential and take forever to get there.
A business plan and the related thinking can be your best friend in business. It’ll help you consider what you could be, the different ways to get there and what might come up along the way. It gives an opportunity for key people in the business to be involved which both increase engagement and accountability. A business plan is the ultimate KPI for you and your team to be accountable against.
People ask how much time should you put into creating a business plan. I have found for a normal company, it takes around 2 days to work through a creative process to build a business plan that you could say hand on heart, has been well considered. Of course big companies will take longer than this. Each key division within a larger company needs its own plan that feeds into the overall company business plan as well. I run two versions of two day group business planning workshops, one with many different companies attending at once with senior staff to create their business plan and another with several divisions from inside a large company attending to work through their business plan at the same time. I’ve found similarly by working one on one with many companies (eg. an executive team or business owner) that in 2 days of intense focus, you can come up with a very solid plan and walk away with a business plan that will set you up well for the future. The plan might not be totally finished in 2 days as you might need to do further work and test things but you will be a long way down the track in finalising. I’d suggest it is a couple of days you should be prioritising for the good of your business.
A business plan can take any format that works for you to keep you heading in the right direction and it’ll add accountability to do something about it but I suggest you have a succinct version. Many people think of a business plan as being a ‘54 page’ document that the bank wants to see when you want to borrow money. Beware of the ’54 page business plan’ as you are unlikely to look at it much – as they say it will sit in the bottom drawer gathering dust. A business plan is only worth its weight in gold if you look at it regularly. If it is succinct you are more likely to read it and be accountable against it.
Many businesses are poor at implementing their business plan. Other stuff comes up day to day and they are too busy fighting fires. Thus implementation of your plan is key including a strong review process to ensure key people are being accountable to deliver upon the plan. That said, people ask me, what is more important, the creating of the strategy or the implementation of the plan? There is no point being great at implementing the wrong plan and strategy for your business. Time needs to go into creating the right plan in the first place.
Something else incredibly powerful with a business plan is that it helps the overall company know where the business is going and how to get there (assuming key parts of it are shared with all). Your team want to know this and it will be one of the key factors in getting them more engaged and loving your business, which ultimately customers will notice.
I wonder if I could see a show of hands of everybody reading this, whether more than 10% of you would already have a business plan and would be being truly accountable against this plan?
Zac de Silva is an award winning profit maximisation specialist, facilitator and speaker and founder of www.businesschanging.com – email him at email@example.com to find out more about his next 2 day business planning workshop.