Just How Important Is Planning?

jim

Whether you are a small business or large, business planning is the only proven methodology to create and sustain a successful business. It has been proven time and again by start-ups, mature companies and public entities. Though not infallible, the alternative is more than bleak.

The much used and often abused…” If you don’t know where you’re going – it doesn’t matter what path you take” …crystallizes the position that many owners unfortunately find themselves. When confronted with a view of the road ahead that leads to nowhere – the panic can rapidly set in. And that need not be the case.

Firstly, let’s understand the need to do a business plan at all. There are many reasons and they are typically geared to the targeted audience.

Start-Ups have their own unique reasons and needs. They include:

  • Arranging seed capital
  • Arranging equipment loans / leases and lines of credit
  • Arranging supplier credit without a full personal guarantee
  • Arranging a premises lease without a full personal guarantee
  • Attracting partner and other stakeholder investment
  • Recruiting key managers and sales executives and staff
  • Recruiting and retaining operations staff
  • Inspiring and motivating staff – with a laser focussed plan
  • Product / service differentiation
  • Financial Projections and Business Drivers
  • Creating company culture with Vision / Mission / Values
  • Brand development and extension to other markets
  • Maximize Cash Flow

Next Level Companies different needs. They include:

  • Most all of the above, and
  • Removing guarantees on a premise lease
  • Retaining and growing market share
  • Retaining and growing the customer base
  • Enhancing Customer Service against rising competition
  • Assess new products/services and markets served
  • New product / service roll-out, funding & options
  • Establishing your USP against increasing competition
  • Continued Product / service differentiation
  • Continued Brand development and extension
  • Cash Flow and more

Established Public or Private Companies needs are more complex. They include:

  • Most all of the above, and
  • Selling all or division of the company
  • Merging with another company
  • Projections on how markets served will evolve
  • How credible the assumptions are supporting the business model
  •  ‘What if’ scenarios – best, likely and worst case
  • Detailed financial modelling on the ‘What if’ scenarios
  • Risk mitigation and contingency plans
  • Continued brand development and extension
  • Project Validation – business case for new product launches
  • Cash Flow and more

When all is said and done, if the Executive Summary of your plan has lost the audience, it doesn’t matter how thick or thin the document or binder. Creating a great business is not easy. If that were the case a new Google, Amazon, Dyson, iPod, Microsoft would be invented every day.

Additionally, the blinding speed of change in business today undermines strategy and tactics made a mere 2-3 months ago. The thought of a 5 year plan is a thing of the past, and the 3 year plan has one foot on a banana peel. Having said that – having no plan is not an alternative as the process is the critical element.

Whether a scaled down Business Plan or more   a small /medium sized business owner needs to consider the first step. In most cases it takes the form of demystifying the unknowns in the Business Planning process. That would include: the process elements, the terminology, the importance of research and analysis on which assumptions are based as well as, the strategy, tactics, action planning and metrics necessary to make the plan real.

The Bottom-line: If a business is to withstand unforeseen market body blows and prosper in a turbulent market – good planning is invaluable and a written, well-structured business plan supported by extensive business modelling is the best way to achieve it. Business Planning is essential.

Jim FitzGerald
Success Elements