It’s been a while since I wrote a blog post (perhaps soon I may explain some of the reasons why in a subsequent post). Please do leave your feedback for me, I’ve love to learn what I’m doing right or wrong in your opinion.
As many of my contacts know, I’ve started a few businesses in my career… some successes, and some incredibly agonizing failures. There are a few things I’ve learned from both the good times and the bad. In a series of posts, I’m going to explain some of the things I’ve experienced and that I’ve witnessed others experience when gargantuan failure occurred.
This post came from a book that I started to write, but it’s become such an ever-evolving piece that I thought it best to break it into “chunks” and share them here. This is the first installment of the “Reasons Your Business Might Suck” series.
We don’t need no stinkin’ plan!
It’s been said that “He who fails to plan plans to fail.” The incredible truth is that most businesses run without a business plan. I’m not talking about an elaborate 100+ page report; I’m talking about a very simple 1-8 page plan of attack that puts everything into perspective. I can tell you that most of the business owners I’ve met have never put pen to paper with regard to writing a plan, and, while there are some exceptions, these oftentimes are the businesses that struggle most not only in trying to run their enterprise, but to understand what may be going wrong or right.
My first business plan was written as the capstone to my MBA studies—the pinnacle of two years of study and nearly 10 years of management experience. I thought I was the toughest kid on the block when I received an A+ on my “baby.” It was 82 pages of pure genius, and I just knew I was called to put this into action. IT GOT ME ABSOLUTELY NOWHERE… except booted out of every financier’s office.
Here’s a hint—
Whether you are looking to get financing from a bank or to simply give yourself a roadmap, you don’t want to write the next Great American Novel. Keep your business plan to no more than 8 pages. Why 8? It gives you a chance to include the following:
- Major Objectives / Milestones
- Strategies to Achieve Those Milestones
- Tactices to Implement Those Strategies
- Marketing Plan
- Assets vs Liabilities or SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis
- Pro Formas–those beautiful numbers with key performance indicators (KPIs) like revenue and expenses
By the way, unless you own a psychic business, you are not a soothsayer. However, you really should attempt to forecast your expenses and income and plot it for each month of the first year, each quarter of the third year, and for the next year in total.
Keep it short and sweet, thoroughly understand your plan, and share it with your trusted advisors. You’ll already have a leg up on the vast majority of the competition who really don’t know what’s going to happen tomorrow, who they’re going to serve, and how they are going to measure their results.
Even if you are thinking about purchasing a franchise, write your own plan. You can use their business plan and pro-forma as a guideline, but make sure you are playing with REAL numbers and REAL LIFE situations. Oftentimes, to make the sale, a franchise or business opportunity will use numbers that are either old, ridiculously optimistic, or just plain wrong. Do your homework!
Oh, and one more thing: WRITE IT DOWN!!!! It’s all well and good that you have this remarkable plan, but make sure that you document everything! None of your goals / objectives are really set unless they are written down. Get used to documentation in your business, folks… it’s a critical part of ensuring your success.
One-Page Business Plan
In a later post, I’ll talk about the elements of a great one-page business plan to get everything so concise even a child could follow what you intend to do. I use these for my clients and even for marketing plans in my own work.