Are business plans still relevant in changing times?
As a business advisor it may seem strange that I should even ask that question at all. Don’t all advisors/mentors/coaches stress the need for business planning and say things like, “failing to plan is planning to fail” ?
Over the past 4 years or so the business world has been turned on its head. No one could have predicted the Covid pandemic and the implications that flowed from it. More recently supply lines have been majorly affected and migration flows have gone from famine to feast. In this type of environment putting a business plan together seems in many ways like a waste of time. When I look at some of the traditional business planning models used, I would tend to agree.
In my opinion it comes down to the type of business plan that is produced and the length of time taken to produce it. Many business plans are a waste of time because they are too long, too “corporate”, don’t motivate staff and are not connected to the day-to-day operations of the business. I read an article recently on writing a business plan (unfortunately I can’t remember where) and it said that a business plan should take between 400 and 500 hours to produce. ARE YOU KIDDING! Who in small business ownership world has a spare 500 hours to produce a business plan, and probably one that no one will look at again for another year, if ever! That would be a huge waste of time.
THE BUSINESS PLANNING PROCESS
What is of real value is the planning PROCESS involved in putting a business plan together. It’s all about the journey, rather than the destination, in my opinion. Also how the plan is IMPLEMENTED and used to guide daily actions. I do encourage business owners to take some time (not 500 hours however) and examine where their business is at, what went right and wrong over the past 12 months (a SWOT analysis can help here), consider the wider business environment, set some realistic goals for the next 12 months and think about the strategies, budget and tactics that will be required to achieve those goals. Then regularly review progress towards their goals using a combination of monthly reporting and quarterly themes that aligns people’s daily activities.
The output from this process need not be a 50 page document that is put on a shelf to gather dust, but a summary on a couple of pages that remains a living, working document, referred to on a constant basis. It is important that the plan is nimble document that can be changed to reflect the current situation, but still provide a framework and target for people to be united behind. Just like Mike Tyson said “everyone has a plan….until they get punched in the face”. You need to be able to duck and weave as conditions change. Not many people could have predicted how dramatically the world has changed over the past few years and I would think any plan developed at the start of 2020 is now redundant. You need to develop a NEW plan for the current environment and to take you through the next 2 to 3 years. And you need to do this quickly.
BUSINESS PLANNING TEMPLATES
There are a million planning templates out there that you can use to base your own planning process off. Most unfortunately focus on the end document and tend to result in a long and dusty plan that fails to inspire. Two models that I have used with success in the past with several businesses is my adaption of the 2-page plan developed by Gino Wickman in his book “Traction”, and an even simpler 1-page plan that Taki Moore (a coach who helped me) recommended.
It takes a bit of time and effort to develop the Vision and foundation parts, but once you have done that, you can quickly update it on a weekly and quarterly basis to provide a short but clear path to guide your business into the future. If you would like a copy of the Traction-type 2-page plan template, just email me at andy@tradescoach.co.nz and I will send it to you, together with a short guide on how to complete it. The 1-page plan from Taki Moore is simply an A4 sheet of paper divided into 4 quadrants, covering different planning time horizons. I can help you with what to include in each quadrant and how to drive your weekly actions using this plan.
At the end of the day putting a business plan together is NOT a waste of time, but you want to use the right type of plan that suits your needs and most importantly, review it regularly.
Want to review your planning process and see how it can be enhanced? Book a free strategy session here.