Inside Small Business | Small Business & Home Business Marketing
Preparing for Success – Back to Fundamentals: Planning, not Just a Plan
Tim Berry, Founder and President of Palo Alto Software
As we talk about preparing for success, let’s take a few minutes to focus on the fundamental benefits of business planning.
And I emphasize, on purpose: that’s planning, not just plan. When you say “business plan” you refer to something that’s far too likely to end up as a one-time effort, a document, something that can get lost in a drawer somewhere.
So, instead of that, and particularly given our theme of preparing for success, plus the early days of a brand new – and long-awaited – 2009 year, let’s all remind each other that what really works in real business is planning.
Former U.S. President Dwight D. Eisenhower, a military leader before he was president, once said: “The plan is useless. Planning is essential.”
So with that in mind, and in an effort to clear the misunderstandings surrounding business planning, I’m going to suggest a relatively simple procedure to push your business ahead along with the New Year.
Step 1: Set Your Objectives Right
We so often forget that planning anything – not just a business, but a project, a trip, or just about anything – begins with setting the right goals and the right context. I’m amazed at how many people running their own businesses never stop to think about what success really is, for them. How about you? What do you really want from your business? Is it all a matter of grow it then sell it, or do you want to use your business to build your life, to let you do what you like, when you like, and have enough money as well.
That’s not a joke. Here I am, Stanford MBA and planning expert, 60 years old, realizing more and more that the businesses I’ve built were more for escaping boredom while feeding and raising a family than for anything else. I wanted to do something I believed in, surrounded by people who shared the belief. Sales, profits, growth, and cash flow independence were factors, not the ultimate objectives. What about you?
Step 2: Open Your Eyes. Step Back. Take a Fresh Look
You’re usually too close to your business to see it. Take a step back to look at the opportunities near you, the business you’re missing. What do your customers really want, and why? What have you been missing? How are you different, and how does your difference flow into strategy, and differentiation, and serving a more well defined target group, and serving them better?
Now take a good look at 2008 and what that year taught you. Where did things go right, and where wrong, and what did last year teach you? How do you take that into this new year as leverage and momentum?
Step 3: Do That Business Plan
Now, in that frame of mind, do that business plan you know you’ve been thinking of, but this time do it right. Do only as much as you need to work your business, and produce only the output you need for management and steering and business goals. You keep it on your computer unless you need a document to show a bank or an investor or somebody else. You include strategy and steps to implement strategy, meaning milestones, responsibility, metrics, dates, deadlines, and basic numbers.
Step 4: Live With the Plan. Keep it Alive.
The real win comes not with the original business plan – although that’s essential – but with the following up and management that comes from working a plan. Of course your plan will be wrong – they all are – but that’s just the first step towards management. Schedule your plan reviews, go over how your assumptions have changed and how the actual results were different from the plan, and then revise the plan to deal with change. Planning isn’t about pretending things won’t change; on the contrary, it’s about managing the change that we know will happen.
If you don’t have a plan, then you don’t even know what changed. With a plan, you now have a measure of what’s changing and why, while you keep your ultimate goals in mind too. Now you’re steering your business, proactively, instead of just putting out fires and trying to survive.
Final Thoughts
Real preparation for success is planning, and I hope we can all get together and dispel some of the widespread myths that stand between many people in business and the business planning that will help them do better. It’s not just a business plan document, written according to some magic recipe; it’s a business planning process, which will end up helping you to run your business better. It starts with a plan, which is essential; buy that’s really just the beginning.
* Tim Berry is the founder of Palo Alto Software, a co-founder of Borland International, and a recognized expert in business planning. He makes several notable appearances in Fire in the Valley, Swaine and Freiberger’s classic history of the PC industry, and is the originator of plan-as-you-go business planning. Today, Tim dedicates most of his time to blogging, teaching, and evangelizing for business planning. His popular Planning, Startups, Stories blog is featured on AllTop Small Business. He also writes the Up and Running blog for Entrepreneur.com and contributes regularly to Business in General, All Business, the Huffington Post, and other publications. His full biography is available at TimBerry.com.
Posted on Monday, February 2nd, 2009 at 4:02 pm and is filed under Leadership, Marketing, Small Business. You can follow any responses to this entry through the RSS 2.0 feed.
