By John E. Anderson and Jordan Robertson
There’s a history of divided views on business planning and strategy. Views range widely. Some entrepreneurs say “Who’s got time to plan?” and “Plans are a waste of time, since things always work out differently than the plan.” Others refer to “Failing to plan is planning to fail” by Benjamin Franklin and “Plans are useless, but planning is indispensable” by Eisenhower. Obviously, some businesses remain small, other grow, build a successful team, grow and can be sold. Prioritize what’s important and what needs to be done and when. Eisenhower’s Matrix is a good resource.
We’d like to hear your views.
What’s Your Plan?
Making a business plan is useful when starting a new venture or, if events disrupt the market, require a new strategy. Like now!
When developing a business plan, answer the question “why would someone pay for this?”
Parallel questions include:
- What problem does this solve?
- What is unique and novel about my product or service versus competitors’?
- Is this a venture even worth pursuing for me? Can it satisfy clients and be profitable?
- What is the unique value this product or service provides?
- Under what circumstances might this become irrelevant?
The last question has a good deal of utility when assessing the business environment, especially during a crisis like the rise of COVID-19.
Develop a strategy how you will satisfy customers’ needs in a way that delights them and is profitable. A good strategy must stipulate the exact, efficient steps to repeat customer satisfaction. While goals, values and ambition are important, good strategy is more like good project management. Good Strategy, Bad Strategy by Richard Rumelt offers a good guide.
Start with a good idea of a problem you’ll solve or need you’ll fulfill. Build a profitable product, then create secondary product/services. Entrepreneurs need to be nimble adjusting to unexpected playing field shifts. If your primary business does not stay relevant during a crisis such as what we are facing now. What is your backup plan to weather storms?
Making money and keeping some of it are crucial business partners. Risk management is an integral part of leading an organization. Economies rise and fall! Preparing for contingencies is a leadership requirement, and during a crisis, knowing how to pivot gracefully to your backup plan is just as important as knowing how to close sales.
Most personal financial guru’s such as Dave Ramsey and J.L. Collins, authors of Total Money Makeover and The Simple Path to Wealth, respectively, advocate that the first thing that needs to be done when you are managing money is to have a fund set aside in case of an emergency. This money is your safety margin when things happen unexpectedly so you do not have to abandon the plan. This advice is just as important for business.
It may not be possible or easy for a new business to stash away funds to stay afloat for long, but here are some questions worth asking:
- Are there other services I can offer to add value when my primary income/main product or service is disrupted? Restaurants are offering take-out and delivery when required to close the dining room.
- How long can I survive if all work stopped unexpectedly? Be able to scale up and down.
Make your business plan strategic with: history, current circumstance, opportunity, problem or challenge to solve to achieve the opportunity and tactics. Include Rumelt’s “kernel:”
1) a diagnosis defining the challenge
2) a guiding-policy to deal with the challenge
3) coherent actions designed to carry out the guiding-policy.
Plan, implement, test, refine. Start with the baby steps.
Learn about the Institute of Management Consultants imcusa.org and participate in our Oregon & SW Washington chapter LinkedIn community.