The Myth of Business Plans: Why Most Don’t Work
Business plans have long been considered an essential tool for any business. From a sole trader to a multi-million-dollar company, business plans are the maps that set the strategic direction and pathway forward for the business’s growth and future ongoing success.
The Problem with Business Plans
In my experience of working with a wide range of businesses over the last 40 years, most business plans end up like weight loss plans or New Year’s resolutions, they have noble intentions, but end with low success rates.
There is a world of difference between a business with a plan and a successful business.
Having a good business plan can make you feel good, but nothing has really happened in reality. All you you have done is created a document and a sense of excitement over what you hope will happen.
Business plans are only as valuable as the amount of work that goes into preparing, implementing and managing the strategies and tactics set out in the plan. Too often the plan and the intent fades away under the day-to-day demands of the business, and unless they are followed, business plans become just another strategic document that gathers virtual dust on the hard drive of the computer.
So, what sets a growing business apart from a floundering business?
The answer to this question has many variables, however, one of the biggest factors is the implementation and management of the business plan. Thriving businesses regularly evaluate, modify and refine their tactics to find the key combination that works for them.
Your success will not be determined by what you have written in a business plan, but by what you have implemented and monitored.
Let’s break this down.
A clear vision
Having an overarching medium to long term vision for your business sets the path for future growth and should be the guiding light. Otherwise, you are merely setting out a work plan with a list of tasks.
When do you plan?
To ensure that business planning becomes a habit, it is best undertaken around the same time each year, ideally at the beginning of the financial or calendar year. The annual planning session should set out the yearly agenda and specific goals that will steer you towards your bigger vision.
This regular session should also be used to review the success of the previous year’s goals and identify which areas in the overall direction of the business require adjustment.
Having a mentor and facilitator in the planning process, who can challenge and encourage you, as well as provide a neutral sounding board, can help a lot. My client, Bruce Waddington, Managing Director of Geotech Information Services, endorses this proven approach. “The Geotech Board gains immense value from a multi-tiered strategic planning approach, with external mentoring helping us to focus and steer the course over time.”
Action
Nothing will change until action is taken. Once you create momentum, you will advance closer to achieving your goals and your vision.
Instead of focusing on the overarching plan, it is easier to break the plan down into smaller workable chunks that can be integrated into the day to day running of the business. Doing this reduces the workload and the feeling of being overwhelmed. It also combats procrastination in getting started.
Regular reviews and adjustments
Regular evaluation is what triggers us to think, learn and adapt as needed.
The annual plan needs to be tracked during the year at regular touchpoint meetings with the management team, and the mentor, if you have one. This ensures you are addressing and achieving what you set out to achieve for the year ahead.
Rewarding Your Breakthroughs
We usually give ourselves a tough time about what we are not doing right, or not doing at all, but then don’t take the necessary time to pat ourselves on the back when we have had a breakthrough. We should reward our victories, small and large, then get back to work.
Is it worth it and does it work?
Without question, it is worth it.
If executed with the correct approach, businesses that document and work their plan show consistent growth, produce better results and develop as stronger team.
I have witnessed one client grow their business by over 100% in the last year, and another established business that has grown four-fold over the last five years by following this simple, but not easy, planning methodology.