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Chapter 1: It's About Results - Page 1.5

The Planning Process

As you develop that plan you need to get over the business hurdle, always remember that there is potentially much more value to planning than just the plan itself. Aside from the importance of overcoming the hurdle, it's the process around the plan that makes this such a valuable tool for business management.

The planning process includes bringing teams together to develop the plan, making firm commitments within the team, publishing a plan to cement those commitments, then tracking results and following up with plan vs. actual analysis and course corrections.

Professional planners realize that a good business plan is never done, and a good business plan is rarely if ever right. What makes a plan valuable isn't as much the prediction of the future as the guideposts and milestones that keep objectives in mind as the future reveals itself and events are managed.

Control Your Destiny

The business planning process is about controlling your own destiny in a business sense. Set your long-term business goals and use a plan to break the journey from present to future into manageable concrete steps. Don't let the real world of phone calls and daily routines determine your future. Certainly, in the real world, there will be business problems and changes in economic environment, customers paying slower than expected, costs going up on one product, down on another. In business school they called the real world the RW, pronounced "are-dub." Use your business plan to make measured responses to the vagaries of the RW, instead of scattered reactions.

A good planning process helps a plan stand up to the real world. As each month closes, the plan absorbs plan vs. actual results. Each manager keeps track of milestones and budgets, and at the end of each month the actual results are compared to the plan. Managers look at the variance. They make adjustments. They review the performance of their peers. Changes are made in the plan — organized, rational changes — to accommodate changes in actual conditions. Managers are proud of their performance, and good performances are shared with all.

Summary

Business plans don't sell new business ideas to venture capitalists. Venture capitalists invest in people and ideas, not plans. A business plan, though necessary, is only a way to present information.

Please remember that your plan is yours. The content and outline are not dictated by your software. You can easily omit the company chapter, for example, in an internal plan, or the marketing or personnel chapters, for that matter. The choices are yours.

 

Copyright © Timothy J. Berry, 2006. All rights reserved.