“How to” business planning for entrepreneurs?
Perceptions on business planning
I was recently working with a group of entrepreneurs and the challenge of business planning was raised one person. His mind-set was that business planning is a huge, complex and daunting process requiring high levels of professional expertise and a lot of time. It scared him off and he just couldn’t get started.
It is interesting to note the divergent views on this topic. One extreme advocates very robust and detailed documented planning. The other advocates very little formal documented planning, contending that the environment is too turbulent to make planning relevant.
‘Planning is bringing the future into the present so that you can do something about it now.’ Alan Lakein
It’s a question of balance
So which approach should we follow? The answer is that it should be a balance. No planning is falling into the clichéd trap of ‘when you fail to plan, you plan to fail’, while over-zealous planning consumes vast amounts of time and probably doesn’t add commensurate value.
Over 90% of new businesses fail, so It’s obvious that decent basic planning is essential. Experience with struggling entrepreneurs reveals a frequent lack of, or total absence of proper planning, often brings them down. On the flip side working with successful entrepreneurs reveals that their planning is typically robust and they do their homework well. They report that their plans serve as a source of inspiration, motivation and focus. It is their built in GPS. Detailed action plans are however typically not well considered and documented. They maintain that flexibility is critical as they experiment, learn and find the best strategies for success as they move ahead.
‘Planning without action is futile, action without planning is fatal’ Anonymous
Plan what, not how
So what is smart smaller business planning practice? Robust documented planning of what the business is about and what is needed for success is essential. It appears a lot of flexibility must be allowed in the ‘how’ things are achieved, especially in the early days. Over-planning the how restricts innovation, learning and simply figuring things out.
And finally business planning is not that complicated. Numerous useful templates are available. And probably the most useful action is to work through the plan with an experienced and capable entrepreneur or business coach. And just do it!
‘Always have a plan, and believe in it. Nothing happens by accident.’ Chuck Knox
I invite you to review your business plans and leave your comments below.