Business Planning: Are You Missing The Point? (And The Fun?)

Why is planning so important?  Time

The act of planning, whether in business, for a trip, or just planning out your day, is important because of time.

As we all know, time marches on regardless.  In business, that means your expenses march on regardless of what is happening on the “revenue” side of the operation.  If your revenue side does not exceed your costs (expenses) side then you lose money.  This is a scenario that cannot go on forever.  For small businesses, particularly those with limited resources or without other sources of revenue, this will inevitably lead to the failure of the business.

“The plan is useless, but planning is essential.”

– Dwight D. Eisenhower, Supreme Allied Commander of Forces in Europe during World War II and 34th President of the United States

To use a mundane (yet very attractive) example, think about planning a ski trip to Chamonix, France.  Very few people have the resources, flexibility and, frankly, the personality to conceive of the idea of a ski trip to France (if they live in, for example, San Francisco, California) and just take off the next day for a week (or month) in this amazing French mountain paradise 5,864 miles away from their – well, my – home (yes, I checked Google maps).

Most normal people would need to plan a vacation from their jobs, coordinate schedules with their family, buy plane tickets, research and book lodgings, and perhaps spend some time saving up some money or researching what else they might do when they are not hurling themselves down some of the most treacherous slopes in the French Alps (or recovering from said hurling).

In other words, taking a trip like this would benefit from some amount of planning

Now, all but the most diligent people are probably not going to write up a Business Plan (or in this case a “Trip Plan”), but most people will do some amount of research, preparation, planning and even dreaming well before this trip happens.  You might make a list of things to do (goals), create a budget (forecast) and check the calendar (timeframe) to coordinate schedules.  You’ll probably share this info with family and your boss, and maybe a friend or two for the jealousy factor.

Planning a big trip or other large projects are not unlike building, or selling, a business

Business planning of course is far more complicated than planning a trip.  It is also a far more critical and difficult discipline when related to building a successful business venture.

In my experience working with, talking with, and researching, the activities and operations of small business owners and entrepreneurs, two clear deficiencies appear.  Those are, first, the lack of effective, disciplined business planning and, second, the lack of available resources.

Unfortunately, those two items go hand-in-hand when it comes to running a business.  If you foolishly use up your available resources (or fail to appropriately and carefully consume those resources), then you vastly increase the odds of failure.

Why Not Plan?

Why is it that so many small businesses do not adequately plan out their expenses and revenues, and make the appropriate “business model” work out, at least on paper?

I think it is because it is hard work to create a real, comprehensive business plan.  It is time consuming, minute in detail, abstract and requires discipline.  It requires careful thought and a great deal of creativity to imagine the future and see where you might be able to take your business over some finite period of time.  There is also implicit accountability that some might find unappealing.

“If you can imagine it, you can achieve it”
– Andrew Carnegie

Let’s go against the grain here and challenge ourselves to perform at a higher level than we believe possible.  Andrew Carnegie was an innovative thinker in his belief in the power of the imagination and the importance of written goals.  (See an extraordinary book from Henriette Anne Klauser called “Write It Down, Make It Happen.”)

How about using the business plan to set out some goals that stretch the limits of what we believe we can do?  Wouldn’t it be exhilarating to revisit these goals and to see what can be achieved?  Perhaps to see some of the goals we have achieved that we only dared to dream?

Wouldn’t that exhilaration be worth a little work in the business planning area today?

“What Are You Prepared To Do?”

As my father used to say, and sometimes still does, “this is not practice.”  This life we lead today is the only life we get.  This is not practice.  Or to fall back on one of my favorite sayings, which comes from Sean Connery in the film, “The Untouchables,” “What are you prepared to do?

I love that line.  Maybe it can spur some of us on to set high goals and work like hell to try and achieve them.  Now, that would be a worthy goal.

What Are You Prepared To Do Now?

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