5 Steps To Filling Holes In Your Business Plan


Planning is about learning what you don’t know about your business

I hate articles titled ‘“X” steps to “blah blah blah”’, but I caved in. I decided to go this route because for years I have provided advice on what you should do, and I thought it was time for me to provide some “how-to” articles. It turns out this format is a nice succinct way to get across a concept. I have written extensively about leadership, communication, and loyalty. That it takes a good leader who knows how to communicate to develop the plans, goals, processes, etc. required to generate customer loyalty. But how do you develop a plan? Goals? Processes? This article is about the first two, planning and goal setting. I will touch on process development in a later article.

All of what I am going to share with you is best done with a team effort. Starting with the leaders is a good place for steps 1 through 3. After that I recommend getting people from the bottom up involved in the planning process.

Step 1, obtain some knowledge.
First and foremost, read my two books! Seriously!! They are purposefully short and made for people like you. Combined they will provide you with the framework for what an effective plan should look like and what information it should include. They are based on the questions you need to answer to provide the framework for your business. The plan itself comes from that framework. The second book just came out:

OK gratuitous endorsements over. If you prefer, find some other source for a template but beware, templates are not ubiquitous. One made for one business or some particular purpose may or may not fit your business. The point is start with some type of vetted outline for you to use.

Step 2, outline what you know, what you think you know, and what you don’t know.
Once you are ready your first task is to outline everything you already know about your business based on the template you choose to utilize. Make particular note of things you are 100% certain of…facts…versus those that you are less certain about. Anything less than 100% certainty is an assumption. Assumptions are what kill businesses when they turn out wrong. If you are uncertain of something in the template either leave it blank or make a guess (an assumption) based on either your goals or best information available.

Step 3, build a plan to build your plan.
Once you understand what you know, think you know and don’t know you are ready to start developing a real plan. The first step is to list all of the things you are certain of, the facts. Give the list to someone and have them verify that the information you have is accurate and that you are 100% sure that you are 100% certain of these facts. This should be an easy step, but instead it is often one of the more enlightening tasks if done properly (with honesty).

Next list all the answers that you were less than certain of 100%, your assumptions. If you left anything without an answer, leave it for a third list. This is going to be the crux of the work in your planning process. I suggest that you split the development of financial projection assumptions from the rest and let the finance people concentrate on them. Obviously that work cannot be done in a vacuum as everything must tie together in the end.

Develop two columns for each list, one that sorts these assumptions by difficulty to accomplish (time and cost), from least difficult to most, and one that lists them by their potential impact on your business. By the later what I mean is will not having a good solid answer to the question have a high, medium, or low impact on your business. If you don’t know that’s a fourth category. Within each of these groups rank them from most to least critical.

Your team should next marry the data created and determine three things: A) Which answers should be vetted and verified now, in the near term and in the long term; B) Who is going to be responsible for tackling each assumption (or who’s team); and C) The time frame for completing them.

The final step is to create a critical path diagram (spreadsheet, or something more formal) showing dependencies between the tasks to be accomplished. Some tasks may require others to be completed before they can even be started, others can be worked on concurrently. This may alter the information developed in the last paragraph, and that is ok.

In the end you now have a plan to develop your plan! Overall, this is the most difficult step in the planning process. It will need to be revisited over and over.

Step 4, execute your planning process
Now is the time to broaden the team developing the plan. At a minimum management level and above should be involved by asking for periodic review and input. To start with, review the plan with them, including the facts you have developed. Outline the information you feel needs to be gathered/developed/verified to take the other assumptions from question to fact. With that input the plan may be altered. In fact, the plan should be flexible.

As new information is gathered the plan may need to change. For example, if an assumption is found to be bad, other parts of the plan may need to be altered accordingly. If you thought all women were your target market and then found out only women between 18-30 would be interested, you probably are going to make changes elsewhere in your business to focus on the new assumptions/facts.

Step 5, never stop planning
Once you have a complete plan, including financial projections you need a process to measure yourself against those plans. That requires creating specific overall corporate goals supported by department/team goals and, ultimately individual goals. That requires having a good process for ensuring the plan, as well as progress towards meeting it, is effectively communicated on a regular basis. That requires having processes in place to support the business, good training for employees and a great hiring process to ensure you bring people in who can, and are willing to, execute the plan.

Finally, you need a formal process to update the plan. I recommend updating financial projections for the current year quarterly, if not monthly. Out-year projections should be reviewed annually at the time of budgeting for the following year, with an eye into the future for the next 3 years at least. The rest of the plan needs to be updated as required. If something isn’t working, it needs to be investigated and fixed. If that impacts the plan, so be it. The process has to be flexible, yet also firm. If some action is recommended that does not fit the plan, it should be scrutinized carefully before altering the plan. At a minimum there should be an annual review of the plan with updates communicated accordingly. This process should inform the annual goal setting process. Goal setting helps understand and establish training needs and ultimately hiring decisions.

There you go, 5 “simple” steps to developing your business plan. Now perhaps you understand my consternation with such titles. Devolving any subject to a small number of points implies a level of simplicity that rarely exists. The process I have outlined, if it is done properly, is not something you complete in a month. Steps 1 thru 3 can be done rapidly, but I always favor taking the time to plan properly rather than rushing through it to get it checked off your to-do list. Developing your lists and then reviewing them several times over in-depth discussion is the best way to go.

Planning requires regular meetings, which means everyone taking regular action to move the plan forward. Implementation of the planning process (steps 4 and 5) may be something that takes months, perhaps years if there are several unknown assumptions. Some assumptions for example anything requiring FDA or other governmental approval, may take years to turn into fact. So having a planning process in place is paramount to successful execution. In fact, having processes in place for everything done within your business is paramount for long term success.

Your challenge this week? Start the process of planning. Like everything else, taking that first step is the hardest.

Reach out, we can help.

Mitchell Bolnick – The Excel Consulting Group