The traditional business plan has been under attack lately. There's been a lot of chatter about Twitter, a Web 2.0 star, which supposedly found investors without a business plan. One pundit suggests business plans are bad for entrepreneurs because investors will just use them to nitpick. Several others suggest a business plan is bad because, in their minds, if you have a plan you have to follow it.
The detractors are confusing the plan with planning, and not planning is just plain dumb. Dwight D. Eisenhower said it best: "The plan is useless. Planning is essential." I'm biased. I'm a business planner. I don't die with a plan, though, I steer with planning. I think the assault on planning is dangerous.
I may have found the answer. I've been reading Sarah Susanka's the not so big life, a brilliant book, sequel to her not so big house book. It makes me think of the "not so big" business plan.
What is it?
- It's a selection of simple mix-and-match pieces. Do just what you need to run your business, no more. At its core it defines your business, how it's different, what it does for people, its meaning. That core is wrapped with specifics like dates, budgets, and responsibilities.
- It's never done. You keep it alive and working. "Done" is a bad quality in a business plan. Review it regularly and revise as needed. It's a perpetual work in progress.
- It leaves tracks. It's going to change. You want to know afterwards how it changed, when it changed, and why it changed.
- It's not necessarily a document. You might never print it. It's a guide and it takes whatever form works for you. You turn it into a document only when and if you want (or need) somebody to read it.
- It doesn't have to be "right." You're not going to implement it blindly, like running into a brick wall. It leaves tracks you can look back on to trace changing assumptions. You're going to use it to steer. Steering involves constant corrections.
- It's concrete and specific about what is supposed to happen, when, who is responsible, and how much it costs. Otherwise you won't be able to follow changes.
How is it done?
- Get going. Start. Don't finish. Don't think it's sequential, like you don't do anything until the plan is done. The plan is never done.
- Start simple. Take simple steps to make sure each one is valuable. Which steps you take will depend on who you are, what you want, how you think, and how you're going to use it. There is no right order or sequence.
- Study a mirror. What do you want? Who are you? What are your strengths and weaknesses? What are your objectives for your business?
- SWOT is sometimes useful, particularly when you have a team or a group involved. Strengths, Weaknesses, Opportunities, and Threats. Discuss them. Identify them.
- Extend that SWOT thinking a bit to solidify your business identity. Think of this as a simple core, like the heart of an artichoke. Business identity is what you do better than anybody else; how you're different, what you want your customers to identify you by. You get it by looking at your business through the eyes of the customers. Why do they buy? What do they get from you? Why you and not your competitor?
- Fundamental marketing strategy is the message and its delivery. Given your core identity, what can you tell people, and in what media? Are you going to live by word of mouth, advertising, website, signage, location, promotion, coupons, telemarketing, point of sales, what? How? Keep it simple; it's strategy. Strategy is focus.
- Leave tracks. You'll want to look back to review changed assumptions.
- Set up the steps. These are imaginary steps towards your objectives, out there on the horizon. What logical steps would it take? Now turn them into specifics. List what's going to happen in your business, when it is supposed to happen, and who is responsible. Put start dates and end dates onto your activities, put a living breathing person in charge, and set spending amounts.
- Set up metrics. You really extreme web 2.0 people (you know who you are), who think Twitter's financing frees you from metrics or accountability or even responsibility ("Yoopee, no plan!"), are you not accountable for anything? Not even for traffic, users, clicks, pages, profiles, or reviews. Nothing? Good luck with that.
- Plan cash flow. How much are you spending on people, on rent, on pay-per-click or whatever? Where's the money coming from, and how much, and when; and where is it going? Ironically, for those people who seem to think of a plan as a straightjacket, it's really more like a navigation map that shows the hidden obstacles along the way.
- Set up schedules for frequent review. Your plan will change. Your assumptions will be wrong. Your plan will be wrong. You're going to use it like a steering wheel, to make corrections, track changes, etc.
- Identify important assumptions. How will you track them? How will you know when they've changed?
- Admit it: you're always planning. You're always thinking about this stuff. Now you're writing it down - not printing, necessarily, not even sharing until there's a benefit to that, but planning and tracking, always.
Keep your head up. Keep your eyes forward, scanning the horizon, watching for what's coming up ahead. If you're an athlete you've heard this from coaches as you dribble or catch or run. If you hate sports metaphors, then think about walking a busy city sidewalk. Don't look down, you'll bump into somebody. Look up.