I’d like you to ask yourself this very important question: “Is my business on MY road to success?”
If your answer is something along the lines of, “Um. Yeah. I think so. I’m doin’ all right. I think it’s goin’ pretty well, so far.” Or, “Not really. It’s not where I’d like to be and I’m not sure how to get there.” – then do yourself and your business a big favor and pay close attention.
What’s that? You don’t have a Business Plan? If you don’t have a business plan, how can you know if your business is on target? The fact is, without a plan, you haven’t identified the target so you cannot know if your business is successful. That could be very frustrating. And it is very risky.
Do you drive a car? When embarking on a road trip to a new destination, do you get into the car and drive toward the general vicinity without a planned route? Maybe that’s okay when you already know how to get onto the highway, and you know your destination is at a certain exit just off the highway. But what if you find, as you approach the exit, that the ramp is under construction and closed with no detour sign. You haven’t planned for this contingency, so now what?
Let me tell you a personal story that illustrates my point.
In January 2010, I began a road trip that started at the Lombard, Illinois campus of National University of Health Sciences traveling as far as Santa Barbara, California, with many stops and detours along the way. I traveled and drove by myself. Alone. I had just left medical school for a sabbatical to explore business and life, and having just moved out of my university campus apartment, I was homeless, had no steady income, and had very little financial reserves. Months earlier, I purchased a ticket to a business finance workshop in L.A. but I did not buy my plane ticket at the time, deciding instead that I would drive and visit with family and friends along the way.
If you haven’t driven cross country, let me put this trip into perspective for you: Lombard to Los Angeles is 4,000 miles round trip in approximately 60 hours. To many of you that seems like a daunting journey…probably because you see the beginning and end with none of the PLAN.
In preparation for this journey, I sat at my computer and scoured Google Maps for the major routes and alternatives, and who along each of those paths would be glad to feed and house me during my visit. Now any of you familiar with winter travel, especially involving the Midwest, know that weather and road conditions must be evaluated and considered carefully. Any of you who has driven more than 250 miles in one drive know you must also plan for fuel for the vehicle and yourself, and comfort stops because we only rent the fuel for ourselves.
I planned my route carefully and knew several alternate routes available to me just in case the weather forecast indicated my need. Good thing I had my contingency plan because most of this country was slammed with a snow storm during my travels. (If you don’t remember, go ahead and do a search for “january 2010 winter storms” and “february 2010 winter storm”.) AND, because I planned very carefully, I MISSED ALL OF THE SNOW and, aside from one thunderstorm driving through Dallas, and another chasing me out of Santa Barbara, I had near perfect weather for the entire trip. I didn’t get lucky: I had planned for various contingencies and knew the alternate routes.
Now, back to the business of business plans:
Can you possibly be on the road to success if you neglect to enter the correct information into your GPS. Well, the truth of the matter is yes. Yes you can, possibly. But I can promise that it will be far more challenging without a detailed plan that includes your options and consequences for the journey’s detours. What if I had gotten into the car and set out toward the West Coast without a planned route, and without knowing any alternative? I probably would have been stuck at my aunt’s house in Mountain Home, Arkansas for two weeks if I had not left before their ice storm and taken the southernmost route instead of the middle route I originally planned to drive. The southernmost route would add four hours of driving, but it would be less likely to be hit by the snowstorm, which could easily add hours in traffic, factoring in drivers of that region being inexperienced in maneuvering over snow-covered roads.
YOUR BUSINESS PLAN IS YOUR SUCCESS PLAN! Your road map to your desired destination. Which, of course means you must pre-define success in order to create success. Just as in traveling from point A, you must decide where is point B before you can navigate to it! Otherwise, your travels are exploratory and subject to chance. Likewise your attempt at business, despite your supra-ordinary skill or exceptionally creative and useful product, has but a mere chance at reaching it’s full potential, which would mean YOU would have a mere chance of reaching YOUR full potential without a plan!
“Failing to plan is planning to fail!” – attributed to Sir Winston Churchill
In the 25 years that I have been consulting with entrepreneurs, hobbyists, and technicians, I have found most have forged ahead in business without a formal business plan. True entrepreneurs are just a little better at the big picture than are hobbyists and technicians. Before I continue, allow me to define these terms to ensure we are on the same page.
- Entrepreneur – A person who identifies a problem, finds one or more way to provide a solution, and seeks to profit in the implementation of that solution. Skill at the means to the solution is not required since entrepreneurs are willing to outsource tasks to technicians. An entrepreneur has little emotional attachment to what is being produced or how, as long as the outcome is mutually beneficial.
- Technician – A person who is talented and/or skilled (better than most) at a particular hands-on task/craft, regardless of the enjoyment or profit – or lack thereof – that is derived. I will venture a guess that many of you reading this blof fall into this category. You love your work, are great at it, and have provided services pro bono from time to time. Maybe even too often, but we’ll get into that in another post.
- Hobbyist – A person who does something for enjoyment regardless of talent or skill level, quality, or profit
Now that we have established those operational definitions, let’s get back to forging ahead without a plan.
New businesses may start out with a bang and fizzle out shortly thereafter for the lack of a Plan. Although you will often hear that new businesses fail for lack of working capital, the truth is that the lack of sufficient capital is the result of the lack of a good Plan! The demise of the business dominoes from bad Plan, to insufficient funds, to all the areas of the business touched by (or, more specifically, NOT touched by) either sufficient start-up capital or revenue from sales.
Interesting to me and I hope of value to you is that I have also found a few established corporations in dire need of reevaluating their outdated business plan. You see, a business plan is a living document, not a done-once Constitution type document. (I promise I won’t get political right now.)
Okay, okay! Now, you KNOW a Business Plan is important. But maybe you’re a little embarrassed that you don’t know much about them. What should be included? How much or little details? What format?
First of all, unless you have an degree in business administration, there is no need to be embarrassed if you don’t know much about business plans. And, if you didn’t hire a professional to help you write yours, no need to fret that your business plan is weak because we can help strengthen it! Click to select our business plan offering.