Business owners tend to react in one of two ways when asked to create a business plan:
- They roll their eyes, knowing they will have to create a complex, 40-page report full of lofty narratives and colorful charts.
- They mutter something about not needing a plan to operate their businesses because they are not seeking a bank loan.
Business planning is the most misunderstood concept in entrepreneurship today. The venture capital community has taught us to believe we cannot create and build a great business without a business plan which can double as a door stop. Business planning, which is different than a business plan, is critical for any business owner to understand and execute. I compare business planning to the GPS system in my wife’s car or the atlas in my car. (Yes, I still use an atlas and do not use GPS in my car yet – perhaps the final way I cling to low-tech ways!) GPS helps me select a destination, map the route to where I am heading, and recalculates my path if I must take a detour. Business planning does the same thing for your business. It is the roadmap for how you will make your business happen.
I’ve written formal business plans, and I have found the best planning exists on a single page. I created the Whiteboard Business Playbook to help entrepreneurs create a simple and focused method to measure their success. The Playbook has six sections, each answering a specific question about your business.
- Core Purpose – WHY are you starting this business? If you do not have a compelling reason for why you run this business, it will be hard to maintain momentum when you encounter bumps in the road.
- Vision – WHERE do you want the business to go in the next two to three years? I have found that a shorter-term vision helps people focus their attention and resources more effectively than longer-term visions.
- Objectives – WHAT do you want to achieve? You must be able to measure your objectives on a chart for them to have any meaning. “Grow sales by 30%” is an objective. “Sell more to existing customers” is not an objective.
- Strategies – HOW will you achieve your objectives? Each of your strategies must tie to at least one of your objectives. “Sell more to existing customers” is a strategy to achieve the objective of “Grow sales by 30%”. Multiple strategies can achieve the same objective. One company may want to penetrate new markets while another company will focus on generating repeat business.
- Projects and Action Steps (These are 2 things!) – WHO will perform the necessary actions to execute the strategies by WHEN? I follow David Allen’s definition of projects from Getting Things Done (http://astore.amazon.com/whitebusinpar-20/detail/0142000280 – affiliate link) – “A project is any desired result which requires more than one action step.” Companies jumping from strategies to action steps may be very busy, but they will jump from tactic to tactic instead of creating a list of projects to track and manage. I have found that smart business planning identifies the projects to complete, then create action steps associated with those projects.
This planning process links core purpose all the way to the action steps required for employees to execute. Owners’ goals align with the activities required to make business happen. When done right, this type of planning process creates a simple, focused plan of attack which is easy to understand and to measure. Instead of disorganization, a business can focus on what is needed to succeed.
How can you implement this playbook into your own business today?