Writing Business Plans
writing business plans
The Seven Deadly Sins Of Writing business plan
The Seven Deadly Sins of Writing Business Plan
This is the 5th article in the series “Business Plan for Small and Mid-Sized companies”. After being associated with creating, developing and writing business and marketing plans for 30 years, I have codified the critical problems and pitfalls involved in Business Plan development. Hopefully, exposing them to the light of day will help small business CEO from avoiding these critical issues. Although each of the preceding articles has briefly touched upon a number of these issues, they have been formalized and expanded upon here.
To set the stage here is my business planning Overview:
I believe that Planning is a basic organic function of management which requires leadership. Planning is a mental process of thinking through what is desired and how it will be achieved. Planning is a process which can identify the most promising opportunities. Plans, on the other hand are commitments to specific courses of action growing out of planning. It will outline how to successfully capture these opportunities or maintain the desired position. The Plan defines the goals, principles, procedures and methods that will determine the desired position.
A Plan is:
A process by which management can identify its most promising opportunities.
It will outline how to capture these opportunities or maintain its desired position
A continuous Process – not as one-shot activity
A communications tool which integrates all activities of the business’s activities with it.
A specification as to who will do what (responsibility), where, when and how (authority) to accomplish the organizations goals in the most efficient manner (accountability)
Problems, Pitfalls and Deadly Sins
And here they are ….
- 1. Insufficient Preparation and lack of senior management commitment
- 2. Who’s starting and in the Lineup
- 3. Sacred Cows, Not Invented here
- 4. Get in Line and jumping the turnstiles.
- 5. Data over and under kill
- 6. Dropping the bomb on operations
- 7. Post partum blues
- Insufficient Preparation and lack of senior Management commitment
I saved the best or worst for first. It is ESSENTIAL that Senior Management be fully committed to the Specific Planning Process about to be undertaken I have witnessed CEOs talk about the planning process in ivory tower terms but not ready to commit senior management and/or the time and resources necessary to undertake the process.
The responsible senior executive must assure that those involved in the planning process be fully trained and conversant with the steps, process and timetable and expected results. Generally, this requires a series of preplanning sessions to assure that there are no surprises or unrealistic expectations in the process. Each of the participants should “clear the decks” and be fully focused on the effort.
Of course, reality rears its head and contingencies have to be anticipated in dealing with “crises issues’ developing and the Planning Team’s integrity and efforts.
2. Who’s starting and in the Lineup
The CEO should determine the makeup of the Planning Team. I strongly urge that the functional heads of Line, staff and Operations functions be included for their unique perspective, expertise and experience. and because their units will be entrusted with plan implementation.
Of course, all organizations have their mavericks, their “politics” and those on the “outs”. A wise CEO will make every effort to include all to forge a consensus and to capture creativity, 3and experience regardless of where it comes from.
3. Sacred Cows, Not invented here.
This issue is easily the most sensitive problem and pitfall. I recall spending many hours with planning teams skirting or dancing around a specific issue because everybody knew that the CEO or a top person wanted things done a certain way and therefore that SACRED COW was stifling creativity and forward movement. As an outsider, I could raise the question why? why? And ease the situation. Because we “always did it this way” is no longer acceptable or advisable. Similar intervention is required when “we can’t do it that way because or that’s a stupid idea, etc. the CEO must be overly aware and sensitive to these sticky problems and be confident enough to intervene in a decisive manner. I’ve seen a few CEO sacred cows destroyed with a dose of hearty laughter and relief by the other senior managers. In these tough economic times, you can’t afford those old ways of doing business
4. Get in Line and Jump the turnstile:
The Eight Step Business Plan Process I have used and advocated for years is sequential and cotinuous. Each step is structured to build upon the solid foundation of thinking encapsulated in the previous step. Invariably there is le a team member which wants to jump out of sequence a and has the answer, and is not patient to go through the information and the thinking. In my experience this is generally a younger team member or in a fast paced line position, perhaps sales, etc. I find this to be the case when the member wants to jump from the Situation Audit (fact gathering) and immediately determine Objectives skirting the most critical step (in my view) a detailed WOTSUP Analysis the identification of Weaknesses Opportunities Threats and Strengths underlying planning. The Objectives are methodically set to overcome Threats and capitalize on Strengths and on Opportunities. A brief explanation generally puts things back on track.
5. Data Over and Under Kill
As mentioned previously it is essentially work with managers from both line and staff operations in the preparatory phases so that information and data collection can be prepared in an m accurate, comprehensive and timely manner. By the same token be careful not to request data sets when the cost of data acquisition far exceeds the value to which the data will be used and decisions mad. A cost benefit evolution will generally do the trick; beware of primary research when secondary and public sources can be used and approximated. Your senior people will have “rules of thumb” that can save the day.
6. Dropping the bomb on Operations
I examined this problem in the last article. Operations staffs are generally tasked with Plan implementation. As such it is essential that they be included throughout the planning process to prevent surprises, inconstancies, quality issues etc when the process is complete. This goes without saying but I have seen disasters, particularly when new product introductions come down and there is a “mess” because a group was left out of the loop.
7. Post partum blues.
All too often, in a different context entirely, I‘ve seen companies prepare elaborate bound volumes of plans; distribute them to Boards of Directors, Bankers and Lawyers and display them in “desk drawers” ; instead of living with them on a daily basis. Becoming the business roadmap and judiciously updating them and measuring performance against plan and be willing to modify and examine each element with determined flexibility depending on market and competitive conditions. Only then will the organization is prepared to capitalize on the Business Plan taking them to the Next Level.
About the Author
Are there free on-line lessons for writing business plans?
YES — The small business administration offers FREE online courses on various aspects of starting a business, including business planning. You may view the courses offered here
http://www.sba.gov/training/courses.html#busplan
You may also want to review some sample business plans to see how it actually looks like:
- Bplans.com http://www.bplans.com/sp/businessplans.cfm
- MOOT Corp Business Plan competition winners
http://www.businessplans.org/businessplans.html
- VFinance – View hundreds of real business plans in pdf format. http://www.vfinance.com/home.asp?bps=1&ToolPage=bps_main.asp
- business owners Toolkit Sample business plans and information on how to create a plan. http://www.toolkit.cch.com/tools/buspln_m.asp
- PlanWare Planning software and information. http://www.planware.org/
- Virtual Business Plan Walk through the design of a business plan. http://www.bizplanit.com/vplan.html
-sba business planning guide http://www.sba.gov/starting_business/planning/basic.html
- Small Business Advancement Center http://www.sbaer.uca.edu/business_plan/businessPlan.pdf
- sample business plan General planning guide created by the Canadian Business Service Center. http://www.cbsc.org/servlet/ContentServer?pagename=CBSC_FE/display&c=GuideFactSheet&cid
- Business Plans Index – A subject guide to sample business plans and profiles for specific business types from Carnegie Library of Pittsburgh. http://216.183.184.20/subject/business/bplansindex.html
Some recommended books are :
- Business Plans Kit for Dummies
- The Complete Book of Business Plans : Simple Steps to Writing a Powerful Business Plan
- Writing Business Plans That Get Results : A Step-By-Step Guide
- Business Plans For Dummies®
- Your First Business Plan : A Simple Question and Answer Format Designed to Help You Write Your Own Plan
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