The not so big business plan

[I wrote this story in the Huffington Post today. I’m including this post in its entirety here as a service to my readers. Tim ]

The traditional business plan has been under attack lately. There’s
been a lot of chatter about Twitter, a Web 2.0 star, which supposedly
found investors without a business plan. One pundit suggests business
plans are bad for entrepreneurs because investors will just use them to
nitpick. Several others suggest a business plan is bad because, in
their minds, if you have a plan you have to follow it.

The detractors are confusing the plan with planning, and not
planning is just plain dumb. Dwight D. Eisenhower said it best: "The
plan is useless. Planning is essential." I’m biased. I’m a business
planner. I don’t die with a plan, though, I steer with planning. I
think the assault on planning is dangerous.

2007-08-13-notsobiglife.jpgI may have found the answer. I’ve been reading Sarah Susanka’s the not so big life, a brilliant book, sequel to her not so big house book. It makes me think of the "not so big" business plan.

Just as her not so big means simpler, streamlined, and more
practical, so too with my "not so big" business plan. It’s appropriate
to what you really need for your business. Yes, even you Web 2.0 geeks
in the back of the room, celebrating your alleged freedom from the
business plan as if the math final had been canceled. So it’s time for
the not so big business plan.

What is it?

It’s a selection of simple mix-and-match pieces. Do just what you
need to run your business, no more. At its core it defines your
business, how it’s different, what it does for people, its meaning.
That core is wrapped with specifics like dates, budgets, and
responsibilities.

  • It’s never done. You keep it alive and working. "Done" is a bad
    quality in a business plan. Review it regularly and revise as needed.
    It’s a perpetual work in progress.
  • It leaves tracks. It’s going to change. You want to know afterwards how it changed, when it changed, and why it changed.
  • It’s not necessarily a document. You might never print it. It’s a
    guide and it takes whatever form works for you. You turn it into a
    document only when and if you want (or need) somebody to read it.
  • It doesn’t have to be "right." You’re not going to implement it
    blindly, like running into a brick wall. It leaves tracks you can look
    back on to trace changing assumptions. You’re going to use it to steer.
    Steering involves constant corrections.
  • It’s concrete and specific about what is supposed to
    happen, when, who is responsible, and how much it costs. Otherwise you
    won’t be able to follow changes.

How is it done?

Do it in pieces. Start wherever you think it is easiest and add to
it as needed. You don’t do it in any particular order; you don’t have
to start at the beginning and go through to the end. Jump in wherever
you feel like. You don’t necessarily cover all the bases, at least not
all at once. In this case it’s a process, not a document. Choose what
works for you:

  • Get going. Start. Don’t finish. Don’t think it’s
    sequential, like you don’t do anything until the plan is done. The plan
    is never done.
  • Start simple. Take simple steps to make sure each one is valuable.
    Which steps you take will depend on who you are, what you want, how you
    think, and how you’re going to use it. There is no right order or
    sequence.
  • Study a mirror. What do you want? Who are you? What are your
    strengths and weaknesses? What are your objectives for your business?
  • SWOT is sometimes useful, particularly when you have a team or a
    group involved. Strengths, Weaknesses, Opportunities, and Threats.
    Discuss them. Identify them.
  • Extend that SWOT thinking a bit to solidify your business identity.
    Think of this as a simple core, like the heart of an artichoke.
    Business identity is what you do better than anybody else; how you’re
    different, what you want your customers to identify you by. You get it
    by looking at your business through the eyes of the customers. Why do
    they buy? What do they get from you? Why you and not your competitor?
  • Fundamental marketing strategy is the message and its delivery.
    Given your core identity, what can you tell people, and in what media?
    Are you going to live by word of mouth, advertising, website, signage,
    location, promotion, coupons, telemarketing, point of sales, what? How?
    Keep it simple; it’s strategy. Strategy is focus.
  • Leave tracks. You’ll want to look back to review changed assumptions.
  • Set up the steps. These are imaginary steps towards your
    objectives, out there on the horizon. What logical steps would it take?
    Now turn them into specifics. List what’s going to happen in your
    business, when it is supposed to happen, and who is responsible. Put
    start dates and end dates onto your activities, put a living breathing
    person in charge, and set spending amounts.
  • Set up metrics. You really extreme Web 2.0 people (you know who you
    are), who think Twitter’s financing frees you from metrics or
    accountability or even responsibility ("Yoopee, no plan!"), are you not
    accountable for anything? Not even for traffic, users, clicks, pages,
    profiles, or reviews. Nothing? Good luck with that.
  • Plan cash flow. How much are you spending on people, on rent, on
    pay-per-click or whatever? Where’s the money coming from, and how much,
    and when; and where is it going? Ironically, for those people who seem
    to think of a plan as a straitjacket, it’s really more like a
    navigation map that shows the hidden obstacles along the way.
  • Set up schedules for frequent review. Your plan will change. Your
    assumptions will be wrong. Your plan will be wrong. You’re going to use
    it like a steering wheel, to make corrections, track changes, etc.
  • Identify important assumptions. How will you track them? How will you know when they’ve changed?
  • Admit it: you’re always planning. You’re always
    thinking about this stuff. Now you’re writing it down – not printing,
    necessarily, not even sharing until there’s a benefit to that, but
    planning and tracking, always.

Get going

Planning isn’t supposed to hold you up or hold you back. The plan or
lack of a plan is no excuse for sitting back and waiting for something
to happen. Don’t assume that your Big Business Plan will ever be fully
finished anyhow. Start planning today, whether you’re planning a new
business or growing an existing business. Planning is what matters, not
just the plan.

Keep your head up. Keep your eyes forward, scanning the horizon,
watching for what’s coming up ahead. If you’re an athlete you’ve heard
this from coaches as you dribble or catch or run. If you hate sports
metaphors, then think about walking a busy city sidewalk. Don’t look
down, you’ll bump into somebody. Look up.

— Tim

5 thoughts on “The not so big business plan

  1. Looks like it might be time for "Business Plan Lite". Cept, where do you go with your price since it's already a Lite price? Maybe get Mark Andreessen to endorse it, charge more, and tout its time-saving ability?

  2. Thanks Kendall, I assume you're referring to Business Plan Pro and I hope I get some credit for not shilling products on this blog.

    Thanks though, I appreciate the comment.

    — Tim

  3. Great post.

    My own impression is that this trend against business plans is, to a great extent, driven by the explosion of development opportunity on the internet. The first thing young entrepreneurs learn about getting funded is that you need an 'elevator pitch'. They aren't told that they need to conceive an entire 'building' within which to put the elevator. The words elevator and building are somewhat misleading in this analogy, since the first came from defining a potential investor's attention span. The analogy works better applied to the internet using highways or networks and intending to build, say, Grand Central Station.

    Vera

  4. Thank you so much Tim, especially for that last part,

    "Get Going."

    – Graduate student in Japan, trying decide whether to write a business plan or start a business first…

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