Why Business Plans Don't Work

Most business plans are flawed right from the start unless it’s based on the right focus. In order for a business plan to work—to truly be useful—it must be based on your business vision.

The idea of a business plan is very comforting. It makes people feel safe and secure to know that there is a plan which is guiding business activities in the “right” way.

But why is it that business plans almost never come to life? Why do almost all of them, once written, sit on a shelf and gather dust, while the futures they describe never see the light of day, and the businesses they describe get lost their uncertain futures?

Vision

Your vision is your dream documented for the future of the business, including your personal life, and the path you must take to make it a reality. No matter what stage of the business development cycle your business is in (infancy, adolescence, or maturity), as the leader of your business your personal and business visions musts be absolutely clear, documented and closely aligned to everyone in your business. This common shared vision clearly describes where you are going and what is the ultimate destination.
Much like a boat without an engine, a business without a vision is directionless. It lacks real purpose and heart. Furthermore, it lacks the essential ideas of commitment, growth and achievement. Your business plan is the link between the vision of your business and the final output that work is intended to produce.

Your business plan needs your vision to make it come alive, to make it a reality. And similarly, your vision needs the form, direction, and clarity of a business plan to give it relevance to the day-to-day operation of your business.

The Traditional Business Plan

Writing a traditional business plan is usually precipitated by one of two necessities: 1) we need to write a business plan because “that’s what successful businesses do; or, 2) we need to write a business plan for the banker, in order to borrow money.

Most business plans, therefore, are developed from a “head-centered” emphasis. In other words, they are analytical and dry. They are full of charts, graphs, forecasts and mindless dribble. A typical plan starts in the head, and is based purely on logic, reason, and therefore lacks passion, excitement and purpose.

As we all know, humans make choices based on emotions. That’s why we mentor our clients that when attracting and converting new customers, appeal to their emotional mind rather than their rational mind. It is the emotional part of the mind that makes the buying decisions. Therefore, it makes sense that your business plan should inspire that same kind of emotional “buy in” with your employees, lenders, investors etc.?

The Vision-Based Plan

Your vision-based business plan is a statement of your vision and a current description of the main strategies and tactics you will use to make your vision come true. From the strategies and tactics discussed in your plan, each department and position will be able to develop the additional strategies, tactics, and systems to achieve their results and, ultimately, the strategic objective of the company.

Here are some critical points about planning that will make the task a worthwhile endeavor:

1- Start with what is important to you. A mediocre plan that you (and others) feel passionately about will serve you better than a technically superior plan that you do not feel strongly about.

2- Approach planning is more art than a science. Professionally-formatted plans with tons of quantification and data can give a false impression of certainty and precision. Use your best thinking when you plan, but don’t forget that even the best thinking involves educated guesswork.

3- Create a planning framework that accommodates change. Do not think of your plan as a rigid, “final document” with every detail pinned down. Think of it more as a dynamic series of guideposts of key topics to focus attention on and targets to aim for.

4- Solicit input from all employees. The employee input is usually more valuable than the owners. By gaining the input from the employee, you also gain their buy-in into the plan.

5- Treat the plan as a living, growing document. Review it, evaluate it, and revise it. Keep questioning your assumptions. Stay flexible and open to change.

6- Share it with everyone. I challenge you to go any employee and have them produce a copy of your most recent plan. Put the plan in a common area, so everyone can see and share the plan.

A traditional business plan will not give you the results you want because no one is committed to working it. The business plan that always works may look a lot like the traditional business plan; in fact if you could put them side by side and not notice much difference. But their appearance is where the similarity ends. A business plan based on vision, enthusiasm and purpose will trump your traditional business plan every time.