Why Your Business Plan Failing Could Be a Good Thing

Did you know having your business plan fail can be the best thing that can happen to you? Sounds crazy right? But it's true, and here is why.

Why Plans Fail

Business plans, marketing plans, heck any kind of plan is going to fail. Some just a little and others spectacularly. It's not for lack of work or analysis. It's because we can't predict the unpredictable, and when we try we aren't very accurate. Customers and markets are fickle. Something unexpected occurs. Or we just screw up and it all wrong.

I'm sure New Coke looked great on paper. Anybody remember the Apple Lisa or the Cube?

Plan to Fail?

So if plans are going to fail, why bother with them at all? But a better approach is to don't sweat getting your plan right the first time out since chances are it is going to fail anyway. Its more important to understand this and think about your plan B. And remember, this isn't just for business plan, it is for any kind of plan.

Plans are worthless, but planning is everything for success

Since we know change is going to happen and things are going go wrong, why are we got off guard all the time when they do?

The most successful people recognize this happens and are prepared to adjust. And not adjust by blindly taking another, different stab and things. They have planned ahead. They look to the market and find what is working with their plan. They run with the things they got right, They see what isn't working and adjust.

Getting to Plan B

I started to think about this after I read an interview with John Mullins who wrote a book called Getting to Plan B. In it Mullins lays out some approaches you can use to see if and how your plan is failing and how to fix it.

Make no mistake. Unfortunately this isn't a license to be lazy and count on working it all out later. Quite the opposite. You have to do more work, but it is smarter work that gets you through failures and has its rewards in the end.

They look at what others who have succeeded did or didn't do. Same for those who failed. They find the lessons from failures. When they do that they are able to make better decisions. Then they just do it all over again until they get it right.

The lesson is that they are always planning. It's like the idea of the one page business plan. You still have to put in all the prep time on it. No shortcuts. But the what makes this work is that you regularly review and update your plan. You don't just toss it aside when you are done or scrap it if you hit some problem. Fix what isn't working. Adjust to changes and any new or missed opportunities.

This really works

This is how software gets developed only they call it the iterative approach. You don't write a program all at once. You work through it in cycles, getting more done each time. You fix the broken parts and add new features until you are all done. Then you sell it. Unless of course you're Microsoft. MS sells and lets us find the broken parts, but that's a different story.

I worked with a microbusiness that wanted to do consulting on importing/exporting industrial equipment. We found there wasn't a market for their consulting services, but we did find out there was a big need for technical translation services. Okay, we rethought the business model and changed. I worked with another small company that did custom software development. They only wanted to do work on big projects, but they found out that they were making much more money doing body shop work--putting individuals into specific contracts as consultants instead of taking on big projects as a team. Time to change directions.

Writing a Business Plan

Are you struggling to write a Business Plan or even find the motivation to be pick up a pen to even start? Many business people who must write a Business Plan, whether for internal planning or for their Bank Manager, fall at the first hurdle, and don't produce a Plan because they haven't the faintest clue where to start.

There is no excuse for this to happen. If you have never put a Business Plan together, you don't have to struggle on your own because there is plenty of support out there to help you write a blockbuster of a Plan.

Here are some of the places or people you can seek assistance from.

Your Team

Don't ignore the people who know as much about the business as you do - your staff. Enlist their help and use all the knowledge they possess. It's usual to find that, in some cases, they have a more in-depth knowledge about specific areas of the business than you!

Bring together the key people in your business and explain to them what you are planning to do, and that you need their help in compiling a Business Plan. Allocate specific parts of the Plan to the people who have the right skills: sales and marketing to your sales and marketing people; production issues to your production team etc. Tell them that you need a complete overview of their contribution to the business; how their department works; how they interact with the rest of the business; their strengths and weaknesses.

In order that the process doesn't drag on too long, give them a specific deadline by which their contribution has to be returned.

Don't overlook the power of co-opting your staff in helping to complete your Plan. There is no better way to achieve "buy-in" to your vision and strategy than getting your team involved.

Accountants

If you can afford it, you can ask for help from an accountant. He will have seen many Plans and so can provide some practical advice, particularly where Profit and Loss and Cash Flow forecasts are concerned. If you don't feel comfortable with figures or you don't have an accountant within your business, then it would be wise to seek help in compiling these figures, after all, the Bank is going to make some very important decisions based on these forecasts, so they have to be as accurate as possible.

However, don't underestimate the benefits of doing the forecasts yourself. This exercise will give you a very good understanding of how your business works from a financial perspective; you'll realise the importance of managing cash properly and the effect a rapidly increasing or decreasing turnover can have. In addition, because you did the figures yourself, it will give you the motivation to monitor your performance on a regular basis.

Once you have finished the forecasts, you can still ask your accountant to review them to ensure that you're not totally mad! He can give you a formal 'stamp of approval' to include in your Business Plan, so listen to what he has to say.

If you don't have an accountant, speak to other business people and get a recommendation from them as to whom to use. A recommendation can save you many hours of phone calls and interviews.

The Bank

You may think that the Bank would not wish to spend time talking through your idea, but don't forget that they are on the look out for good business, so it's in their interest to get in early before any other Bank does. If you are already one of their business customers, they should be happy to review your initial plans. The Bank's aim is to build a relationship with you, and so they will be pleased to provide their thoughts on any expansion plans. The same applies if you are a customer who maintains an ordinary personal account and is looking to start up in business for the first time.

Getting the Bank involved early on means you can pick their brains and get their early views, before you make any irreversible decisions. You may think that this is a bit odd but being pointed in the right direction may save you time later. For example, by seeking their early thoughts, you may get the impression that the Bank is not keen on your idea so this could give you the clue that you may be better off placing your request with another Bank.

If this is your first time in business, or the first Plan you are writing, asking someone to go through the key issues with you will provide a number of tips and advice, which aren't necessarily included in any Bank booklets or brochures. The advantage of this approach is it won't cost you a penny and you are establishing an immediate relationship with the person who will be reviewing your Plan.

Business Colleagues, Local Chambers Of Commerce or Chambers of Trade

These are organisations comprising of local business people who get together on a regular basis to share ideas and experiences, hold seminars and trade fairs. You may think that people already in business, especially in the same line as you, would not want to help someone else start up in business or expand in case it damages their own firm. However, this is far from the case.

All entrepreneurs know what it's like during the early days in business or the problems trying to grow an existing one. They will be more than willing to share their experiences and give some general advice. You'll be surprised at how generous some business people can be.