Business Plan and Business Planning

“In preparing for battle I have always found that plans are useless, but planning is indispensable.” — Dwight D. Eisenhower

The better focused organizations have already started their annual planning process for the next year. While it would be nice to say that many organizations engage in the ritual of writing a business plan, this is not the case.

Most CEOs, Business Owners and Presidents are often overwhelmed by the mere prospect of the time and effort involved. Some of these leaders pride themselves on the fact that they have never written a plan, so why would they start now?

Invest five hours

Too many Top Executives think about the very first Southwest Airlines business plan (as the legend has it, written on a cocktail napkin in a bar) and believe that they too can have that kind of success.

But, setting aside that napkin, far too many organizations have no plan at all. Some businesses have plans in the heads of their leaders; others have plans that are written down but not shared with anyone.

Although this custom of writing a business is accepted as a “due process” for operating a business and is intended to be helpful, most plans are useless. Why is this?

To start, most plans are too long. Second, most plans are not given a reality check; they are legends in the minds of those that compose them. Third, most plans cover strategy extensively, but ignore tactics. Fourth, there is no follow up. Fifth, there is no accountability. So, sixth, once written, most plans are hole punched, filed into a binder, and put on a shelf where they are left to collect dust.

Effective business planning has a number of elements that matter, but the one most often forgotten is the clear, precise identification of the desired results.

In simpler terms, it means putting onto a single page, in short, burst-like sentences or bullet points, what the goals are for the year.

An effective plan must convey to those responsible for carrying it out: the desired results for the next twelve months.

There should be no more than three major objectives or thrusts for any 12 month period. Any more than that, and execution becomes a complicated, counter-productive task, quickly defeating the purpose of the business plan to begin with.

Once the three objectives are determined, the desired results need to be dismantled so that every employee knows and understands what is expected of them and how their role in the company influences the success or failure of these objectives; in other words, “aligning” the employees with the company goals in order to produce the best results.

More often than not, the people that operate behind the scenes in an organization (the people that make things happen every day) are ignored in the business plan. Those in customer service, human resources, shipping and distribution, accounting and finance, quality control, reception, production and the like are not aligned with the objectives of the annual operating plan.

Is it any wonder how hard it is to make things happen when so many people are left out executing the plan?

Remember, the ultimate objective of a business plan is to maximize the resources, people, talents, advantages, and potential of the organization to maximize profitability and other measurable objectives in a specific period of time.

This can best be done by taking the time to develop a plan, review it, execute it, and have and use a system of accountability.

The 12 months ahead can be a better year for any organization. If, a year from now, nothing has changed, nothing has improved and nothing is happening, see what part of the previous paragraph has not been addressed (bet on either a lack of a plan or the lack of a system of accountability).

The choice is simple: bump along, making little or no progress, or forward motion.

An excellent resource for business owners is the One Page Business Plan, available at the web site of the same name. www.OnePageBusinessPlan.com

If you are the Top Executive in your company, or the head of a division or a department, how long will it take you to write a one page business plan for your organization?