By nature, entrepreneurs are passionate, driven, and courageous, ready and willing to charge hell with a water pistol. Yet, many business owners are poor planners. Author and businessman John L. Beckley said it best: “Most people don’t plan to fail. They fail to plan.” Oftentimes, you’re so consumed with daily business operations that you don’t take time to plan for the future. Inevitably, you experience set-backs and failures that keep you in a hamster wheel of day-to-day worries. But there’s hope. By instituting a business planning process within your company, you can disrupt your present weaknesses enough to make them tomorrow’s strengths.
This article is the first in a mini-series about Planning within a larger series about the 8 Foundational Components That Drive Up Your Business’s Value.
“By instituting a business planning process within your company, you can disrupt your present weaknesses enough to make them tomorrow’s strengths.” – Justin Goodbread, CFP®, CEPA®, CVGA®Click to tweet
Everyone plans. What are you wearing today? What will you eat for dinner? Who’s watching the kids? Many times, you concentrate on your short-term plans more than your long-term plans. You prepare for life’s immediate concerns instead of preparing for future prosperity. But, as American statesman, entrepreneur, inventor, and author Benjamin Franklin said, “By failing to prepare, you are preparing to fail.”
As a small business owner, you tend to do the same thing. You fret about immediate needs and issues in your business more than you plan for the future of your business. In a press release about The Alternative Board’s (TAB) latest Business Pulse Survey, reporter Richard Carufel notes that “the average entrepreneur spends 68.1% of the time working ‘in’ their business—tackling day-to-day tasks, putting out fires, etc.—and only 31.9% of the time working ‘on’ their business—i.e. long-term goals, strategic planning.” Additionally, Corporate Value Metrics, a national corporate consulting company, says that business owners typically work harder on the other seven fundamental components that drive up your business’s intrinsic value than they do on planning.
Knowing, then, that most business owners fail to plan properly, what exactly is business planning? According to the Business Dictionary, business planning is “The process of determining a commercial enterprise’s objectives, strategies and projected actions in order to promote its survival and development within a given time frame.” I agree that business planning needs to be done within a time frame. I also agree that’s it’s a process. Absolutely. However, this definition fails to address available resources. Just because business owners lay out plans doesn’t mean they can afford to do them. Therefore, I would revise the definition of business planning as follows:
Business planning is a basic management function involving the design, the steps, and the quantified resources needed to achieve optimum balance of needs or demands with available resources.
Ultimately, the definition of business planning can be seen in the business planning process. Whether you’re planning your business’s opening, its growth, its projects, its risk mitigation, its sale, its closing, or anything else, all planning begins with a process. Although you can make the planning process as long or as complicated as you like, I tend to break the process into 4 Basic Steps.
Identify goals or objectives to be achieved.
Formulate strategies to achieve the goals or objectives.
Arrange the people required to work the strategies to achieve the goals.
Implement, direct, and monitor the steps of the action plan.
I think that’s the way any type of business planning works. Those are the actions business owners, managers, and employees must take to make a business plan. Yet, while you’re going through the business planning process, you must include the following items within your plans:
Compiling all of those details is tedious. The business planning process can be frustrating and hard. Oftentimes, it causes disruption in business operations. It does. I get it. When you’re doing any type of business planning, you’re going to look at your business – your baby – and realize it’s ugly. You’ll see a need to change things, and that creates conflict. Yet, just because it’s hard doesn’t mean it’s bad. Just because it’s tedious doesn’t mean you shouldn’t do it. Conflict can be good. These planning details are good for you, for your team, and for your business.
Remember, in order to affect the future, you must disrupt the present. You have to create some turmoil to make improvements. Think about a rocket ship. In order for a rocket ship to go forward into orbit, it must have combustion, or disruption. Similarly, planning often disrupts business because it makes you stop and think about what you’re doing well or poorly. Planning gives you a chance to improve upon and fix things.
Be sure to join me in my next article within this planning mini-series where I deal with, the Strategic Planning Framework – the next step in business planning you must do to improve the intrinsic value of your business!