Most People Agree: You Need a Business Plan. Right?
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Spend time perfecting your business plan
It’s the sensible way to plan and run your business. Get in place all the relevant information about you, your team, your product, the market. Tie it all together with a detailed financial analysis, cash flow, P&L, Balance Sheet. Top and tail with an executive summary and a marketing plan and your business is ready to thrive and grow for another year.
And yet…
Business Plans rarely deliver what they promise. They’re not really a plan: they hardy ever get everyone in the company engaged in the goals described in that Executive Summary. More often than not, you will write a business plan for the benefit of somebody outside the company: a potential investor, the bank. The business plan document – very proudly crafted to the best templates – sits untouched and unloved from one business crisis (or success) to the next.
Do you have a business plan?
If you do, when was the last time you read it or updated it or measured progress against it? If you don’t have a business plan, how many times have you started to write one? In all the years I’ve spent working with the largest (and some of the smallest) companies in the world, I’m yet to see a Business (read Strategic or Marketing) Plan really panning out quite, well, as planned.
I’ll let you in on a secret that may be a universal truth (there’s quite some research on this topic, but I don’t want to get all academic on you here…) When I led the strategic marketing and business plan process for a global products company with operations on 60 countries, the annual planning round was a huge exercise involving hundreds of people taking many thousands of hours writing The Plan. It was something of an internal tradition. The customer-facing staff would take time out on ‘away-days’ contemplating the navel of their business environment and coming up with a slick, to-the-template Plan.
And the secret?
No-one in those local operations (many of them SMEs in size) ever revisited The Plan. Until the next year. But – and this is a rather big BUT – the process was very valuable and kept the company ahead of all the competition in profitability and customer intelligence year after year. In fact it was the actual effortof taking time out to examine the business: its goals, its culture, the customers, the competition, the products, the finances. The trick was to include people from all parts of the company in the process, whether from Sales, Marketing, Operations, Finance etc etc. They rarely got together to see how the company worked as a whole. In fact what they were really doing each year was refreshing their business model:
- looking at new ways to innovate in revenue generation
- thinking about new product and service offers
- centering thoughts on the customer and how they chose to spend
- matching all that with the people in the company and how they were organised
So what does this mean for an ambitious digital business in Oxfordshire?
When Dan asked me to write a blog entry for OxonDigital, I was tempted to blather on about innovative business planning and marketing, but then I thought that it might be better to share some of the insights from my time with big biz and how the core is truly relevant to the smallest of businesses (who plan on becoming much bigger!).
The most powerful way to do that all-important work ON not IN the business is to:
- take some time out – even half a day if you can – with the key people in the company (and yes: that may only be YOU!)
- break your business down into its main elements (your products/service, your customers/prospects, your internal and external processes, your financial model)
- think especially about how and where potential sources of income are (take a look at this great post on extracting new online sources of business from Chris Jones)
- get into innovative mode and use insights about your industry/customers/products and more to generate new ways to grow sustainably
There are some fantastic tools out there to help make this really easy. Take a look at this video to introduce you to one of the (free) methods I now use with clients because it’s so intuitive and allows you to plot your entire business model on one sheet of paper or screen:
Once you’ve plotted your business model and some future scenarios, you (and your colleagues, staff, partners) will have a better understanding of what it will take to move the business on and can put in place a real world ‘Business Action Plan’ that you may actually use.
Finally…
You know, it’s OK to continue with the time-honoured approach to business planning. But life is just too short and with just a little shake-up in thinking you can ditch the business plan and remodel your business.
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Good read … nice to see ideas get challenged, and the visual model was a nice succinct way of absorbing information. Its interesting that overall it comes back to communication and getting people together to discuss ideas … a bit like what is happening here.