I happened to find an old program of SNL on the television the other night while I was thinking about this latest post. It was Dana Carvey doing an impression John McLaughlin of the “McLaughlin Group” round table program. I couldn’t help but crack up every time someone would ask a question and Dana would shout “WRONG”.
I started thinking about this next question and imagined a business owner asking me this question. “Do you really need a business plan when you are starting your business? I know it’s a loaded question. Now as you contemplate the answer this. I can’t help but flashback to when I wrote my first business plan. And the two things that strike me also make me shudder.
The first thing is, I wrote my plan and never looked at it again until I found it again while moving my business. Second is, how close I was to my original projections. The only reason I really wrote my plan (I thought) was to get a loan to start my business. It was really nice looking and the bank was really impressed with my ambitious numbers. I figured I was done, “WRONG”.
The 5 year projection was right on. Hey, after I found it I didn’t need to do anything else. I was on the path of greatness. The truth is, a business plan should be only good for about 3-5 years. Probably 2-4 years these days with the way things change. Then you should write another one. But that’s a different article. You should also be reviewing it every year at the least. And if you were my client I’d recommend quarterly. Why, you may ask. You’ve put all of this work into really thinking and writing out a path for you to follow and then if you follow my lead (the first time). You put it into a folder never to be seen again.
It’s kind of like planning a trip to drive from Seattle to Miami, pulling out a map, making note of the route you want to travel with a highlighter, taking notes of the construction along the way, where you want to eat and sleep, folding up the map and putting it back into your desk drawer getting in your car and saying “Here We Go” and drive off towards the interstate. However, this is what some of us do as business owners when we begin our journey as entrepreneurs. We put the map in the drawer. Or better yet some of us don’t even use a map. We use “the force” and just start and when things get sideways we don’t know how, why or what went wrong. After all we know everything there is to know about our business, where it will go and can even tell the future. Yeah, I know…It’s all in your head, “WRONG”.
Your business plan is your guide to really making your business do what you want it to do. From determining who your market really is, to researching what the competition isn’t doing, as well as forecasting sales projections and your expenses. Your business plan should have all of these. Now we’ve all heard of how people started a business by writing a plan on a napkin. While I don’t doubt that there is some validity to that let’s be realistic. I’m sure there are a few businesses that started this way.
Most, probably created the outline for what they want to do and how to do it. Then went back to the office or coffee shop, did some research and wrote out a business plan that they could really follow and use. You should also read your plan from beginning to end. Preferably out loud. I know this sounds weird. But this does a couple of things. It gets you in the habit of seeing your plan as a living thing. I’ve read mine like a story. It also gets you comfortable with talking about your business, the numbers, the plan, your customers and what you are doing next. And if you read it enough times you will begin to memorize your plan and start to feel it. This way as your business evolves, or gets a little left of center you know immediately.
So how long should your business plan be? I mean shouldn’t everyone have a plan that is 30 pages long with graphs and charts? “WRONG”! The correct answer is, it depends on what you intend your plan to do and how big your business wants to be. What I mean is, if you are looking for a bank loan or talking to venture capitalist and angel investors, they like that 30 page stuff. If you and your Aunt Barbara are the only one who will ever see it you may want to leave out the graphs, flow charts and spread sheets and just show the simple numbers.
This probably cuts the plan down to 10 pages or less. I guess in the end, you just need a plan. A map that you can follow and lead you and your business towards success. Now the plan doesn’t guarantee success, but it can help. I heard a rich man once say, “Money can’t buy you happiness, but it can buy a Mercedes so you can drive up really close to it”. Same difference.
Which brings me to my last point. Don’t be afraid to change your plan. If we go back to my map example and the highway you are on has construction and they are making you take a detour, you need to change your route. Right? It works the same way with your business. If you plan calls for something that isn’t working, you need to stop what’s not working and find a different way. Besides contractors don’t like it when you try to navigate your own way through their construction zone unannounced and driving a car that doesn’t have tires the size of Rhode Island. Unless your bringing lunch or snacks.
Your business and your plan are a living and breathing thing. It will grow and mature just like we do. Sometimes fast sometimes slow, and sometimes not when we expect it to. Love your business and it will love you. Till next time. “Bye, Bye” Tell me what you think. I’m interested in your ideas.