Best Laid Business Plans
5 Minute Read
I love a good road trip. In fact, I love them so much that I have created categories for them.
There's the my infant (now infant grandchild) needs a nap road trip. That trip takes from 1 to 3 hours, it tends to wind in concentric circles not-too-far from home, and it exposes me to streets, buildings, and scenery I wouldn't see otherwise.
Then there's the let's just disappear for the day road trip. That one requires a packed lunch and the ability to pinpoint the moment at which one has gone halfway-to-wherever so one can return before bedtime.
There are several other types of road trips, but the one that requires the most planning and energy is the across the country one-way road trip. I've done this one a few times, and it can make you or break you. The last time I did this road trip was moving from Albuquerque to Wisconsin, with three children, three cars, one trailer, two dogs, and six (yes, six) cats. We hit the great flooding rains of the summer of 2008, navigated washed-out roads, and changed our course two times. We didn't make it to even one of our pre-planned accepts-pets hotels, and ultimately we gave up sleeping in order to make it to the bank on the morning of our scheduled house closing. We had a plan, we encountered adversity, we punted, we prevailed.
This is the road trip you are on, small business owner. It requires a really good plan, and then the ability to punt, punt again, and prevail. So why, you may be asking, do you need a plan in the first place if you're just going to have to redirect anyway? And that is a really good question.
You need a plan because it helps you think through as many details and mitigate as many problems as can be anticipated in advance. The phrase to keep in mind—maybe even print out and post on your office wall—is "I must control everything that can be controlled so I will have the capacity to handle the things that cannot be controlled." This is why you need a plan.
Control what you can so you can handle the surprises
So what is supposed to go into your business plan? I'm not talking about that SCORE worksheet you filled out because your business coach suggested it. I'm talking about a working plan that you keep readily available on top of your desk, a reference you glance at daily and think about in-depth weekly to evaluate your progress and avoid potholes.
Who Are You?
The most important element of your business plan is a concise explanation of your differentiation and competitive advantage. This is work that comes from your strategy, and it identifies your secret sauce. It will be made up of elements like how your product is different and serves specific needs or wants, how you make your product, how you sell, where you sell, the services you offer, and your brand story. When assembled, those elements should make your business distinctly different from other brands selling in the same space. Heck, just the fact that you can articulate it will make you different from other brands selling in the same space! This differentiation enables your customers to be able to perceive the reason to buy from you.
This element is important, because it keeps you from getting distracted and taking a different road trip. You may have to make some adjustments to your plan, but you never want to start off for Wisconsin but end up in Maine just because you got off-track.
Where Do You Want to Go?
The next important element in your business plan is your sales strategy and sales forecast. Nothing, absolutely nothing happens without sales. All your other great ideas are dependent on the cash flow that comes from sales. So your business plan must always include an up-to-date 12-month plus 2-year plan for sales. What does that mean? It means you make a detailed, month-by-month sales plan for the next 12 months, followed by a less detailed, broader, one-year plan for each of the following two years. This part of the plan includes both a narrative about the sales activities and events you will do as well as a forecast for each month's (and then year's) sales dollars.
This element will experience many departures from and returns to the plan, because most people aren't very good at predicting the future. So why do it? Be-
cause it lays the groundwork and provides a to-do list for meaningful sales activity. Without this element, there is significant risk that sales activities will fall victim to inattention and neglect. To stick to our road trip analogy, you may change routes several times and your timetable may change, but you will still arrive at your planned destination.
The exciting thing about completing your sales plan is that once it's done, you can see what must be done from a marketing and promotion perspective. After all, marketing and promotion are meant to support sales objectives. For each sales goal you set, you will ask, "what marketing, promotion, advertising, or outreach must I do in order to achieve this goal?" You'll be able to test and refine your marketing and promotion efforts as you monitor the results, but you'll always have your sales goals in front of you to inform your thinking.
What other goodies can you pack into your business plan? Once you know how much you intend to sell each month, you can make meaningful plans for resources to buy raw materials, produce those goods, negotiate with contractors, hire staff, package those goods, and negotiate shipping discounts.
As you can see, the business plan is a very active document. The best entrepreneurs use this type of planning to guide their future planning and their day-to-day operations. Because when you control everything you can control, you have more capacity to handle the surprises.
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