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  • 1.  Personal view on business plans

    Posted 12-18-1998 11:18
    As the owner of a (very) small business in the final stages of start-up, I can
    only say that I believe a business plan is indispensable. I believe that I
    was successful at obtaining bank financing with my first application on the
    strength of my business plan. It was the process of preparing my business
    plan that solidified my thinking on the services, functions, procedures,
    markets, alliances, financial issues and contingencies that I must fully
    understand and prepare for in order to be successful.

    This planning has allowed me to steer a course through changing circumstances
    and set-backs to start a business. During the next phase, I have already
    taken steps to participate in a workgroup of small business owners and mentors
    to continue to update my business plan as it bumps up against the real world
    and to do new planning that focuses on growing an existing business.

    I believe that there probably are individuals who are capable of doing this
    type of planning in their head. I required the rigor of a written plan that
    took hundreds of hours to produce. The process of putting my sometimes vague
    ideas down on paper forced me to confront the thousand little things that I
    had not defined sufficiently to explain well to someone else. This meant that
    I didn't really understand in detail things such as how I was going to
    proceed, what things would cost, what pitfalls could arise, etc.

    There have been many instances in which I wished I had done more detailed,
    critical planning and none in which I felt I had planned too much.

    Gordon Gregory
    Gregory Associates
    Overland Park, Kansas


  • 2.  Personal view on business plans

    Posted 12-18-1998 18:40
    To those who've taken the time to answer my posts, your points are all valid and
    well taken. However, for every person who espouses the need for a business plan I
    can bring out ten who say that yes, they've developed business plans but have
    never looked at them since and are still doing quite nicely thank you very much.
    We teach people to develop and constantly update their business plan, but most are
    so busy taking advantage of the good times, and working like crazy in the bad
    times, to come back to them. So, where are their plans now? Usually in some bottom
    draw somewhere.

    I can't argue with the fact that others looking at the business owner's or
    manager's organisation will easily see that he/she has an idea of where he/she is
    going and how he/she plans to get there if he/she has a good, solid business plan.
    But, I reiterate, these people are from outside of the organisation, not within it
    therefore their motivation for having a business plan is far different from that
    of the business owner or manager.

    I also can't argue with the fact that developing a business plan does impose
    self-discipline on the planner and ensure that he/she has a good picture of how
    he/she is going to get from where he/she is know to where he/she wants to be in
    the future. But, what if he/she is working in an environment where the future is
    still shrouded in mystery and the unknown? What if he/she is actually breaking
    traditions and boundaries and plunging into areas about which no-one has the
    faintest clue as to its form or structure? What if all he/she knows is that there
    is a path and his/her objective is to take it, exploiting any opportunities he/she
    may come across along the way? What is he/she cannot answer the question of
    opportunities or threats because no-one knows what these are yet? Entrepreneurs
    are faced with this problem every day - they don't really know where they are
    going (they just know that they are) therefore they don't know what to expect when
    they get there. But, by heck, they are prepared for whatever may eventuate.

    We used to have a saying in the Army that even the best plans go right out the
    window once the first shot is fired, and in my experience that is exactly what
    happens in business. One may have the most brilliant of business plans but as soon
    as it is activated anything can happen. Unless fate, and their opposition, are
    reading off the same plan then there is no way anyone will ever know how reliable
    their plan is or will remain. Sometimes we just have to throw the dice and go with
    whatever comes up. The trick, in my opinion, is to be trained and confident to
    take the opportunities, not live a plan that might see exceptional opportunities
    overlooked or missed. And history backs me on this contention every time.

    As for myself, while I said earlier that I don't believe business planning is the
    most appropriate use of my time, I do use a form of planning based on the
    achievement of an overall objective (or vision) through the achievement of a
    series of intermediate or sub-objectives. I don't have overall business objectives
    such as 'be a good corporate citizen' or 'be the best consultant in the world'
    because everybody who has been to business school has these and there obviously
    isn't enough room for us all at the top. My vision is to create a business where I
    and my family can retire safely in the knowledge that we will never have to worry
    about money again. (That's not the exact way it is worded but I'm not going to
    share that with the world.) I know exactly what this means and can clearly see the
    overall objective (as can my business manager and accountant). But there are too
    many other unknowns for me to plot an exact line between here and there, therefore
    my strategy for success is a series of hops from one sub-objective to another -
    just as Bill Gates does and it seems to work quite well for him don't you agree?

    And like one of the world's richest men I haven't got a clue where I will be in
    five or even ten years time - my profession is moving so fast that no-one knows
    what the future looks like, much less be capable of articulating it. But that
    doesn't mean that I have no intention of going there anyway. I just know that
    whatever comes my way I will be in the best possible position to reach out and
    grab it with both hands. By way of example, my lastest 'plan', developed about
    ten months ago, didn't even consider the business opportunity that fell into my
    lap, and which I've now subscribed to, in the past 24 hours - an opportunity that
    has seen me undertake a major rethink of what I thought I wanted to do. And the
    reason why I can now move down this path is because I know that my opposition is
    incapable of taking such a drastic and sudden dive off the path that we'd
    previously been travelling down together simply because they are locked into their
    business and strategic planning processes. I don't need to beat them at planning
    and plotting (something which they'd kill me in hands down) because my
    manoueverability and capability to embrace change keeps me well ahead of them
    anyway. By the time they get to where I am now, I will be somewhere else and that
    is my competitive advantage.

    I know I won't convince those who believe that the only way to achieve busines
    success is to have a business plan. But I don't need to - that's not part of my
    plan.

    Have a good Xmas anyway.

    Phil Rutherford