5 Steps to a Better Business Plan
Updated: Jan 10, 2022
Ah, the business plan; and the planning cycle. Whether you're a large or small company, in a new or mature category, with a regional, national, or global franchise, at some point every year, you and your team need to dedicate the time and energy to create a plan of action to propel the business forward.
In my work at companies and with many clients through the years I've created and contributed to a wide array of business plans; some of which are extraordinary, some of which are quite useful, and none of which I trust verge on being fodder for Dilbert.
My continuing concern has always been that many business plans aren’t really plans at all. Rather they're glorified, lengthy descriptions of a business and what it wants to achieve. Fine as far as they go but failures as planning documents because they gloss over or simply ignore the essentials - the hard part. Precisely how the business will get where it wants to go. What significant steps, in what sequence, are designed to deliver what results over what time frame?
By consistently addressing these issues, and borrowing from the best, I’ve reduced business planning basics to the following five questions. They've proven themselves valuable in virtually every planning scenario. When honestly addressed and answered they create a better plan. And when adopted and acted on, the plan leads to a more profitable and sustainable business.
1. What are the priorities for your business?
These are the critical areas requiring management focus and improvement to support the business and deliver its objectives. What powers the business model? What’s most important to success now and in the future? Not a laundry list of everything that can or could go wrong but the short list of significant issues that left undone will undermine the business. Typically, your business should have no more than four priorities. These are then broken down into drivers.
2. What are the key drivers?
These are the major elements that combine to achieve each of the business priorities. What are the key influences in reaching each? What controls, impedes, or enables each priority? What within the company does each priority depend on? What are the relevant external factors? How should they be addressed? While there are always shades of grey, certain things are critical and others aren't. Making these distinctions is decisive in making the best plan possible.
3. What then, are the required actions?
These are the various initiatives and activities that will be undertaken to achieve the goals and targets in each driver. They should be as specific and as detailed as possible. Taken together they outline the steps to achieve each driver.
4. What are the appropriate milestones?
These are the events - the start dates, check-points, and conclusions - that viewed in sequence create the plan's timeline and the business calendar to progress. Clearly they also put the leadership on notice and encourage attention and early action, remedial or otherwise, as the plan unfolds and due dates and developments present themselves. Milestones help focus attention and allocate resources in a dynamic fashion. They also encourage shared accountability and can contribute to creating a culture of no surprises.
5. What are the relevant measures?
These are the numbers, plain and simple. Be they sales figures or other indicators, measures are the yardstick showing progress made or lost toward your goals. The targets that give definition to the business through time. As such they must be clear, universally accepted, and unambiguous. As Peter Drucker said, "What gets measured gets improved" and that's the whole point.
Finally, the better business plan serves the business and its executive team - not the other way around. The plan is simply a tool; it isn't an end in and of itself. The planning process, at least as described, isn't complicated. It is, however, by definition, very demanding. Establishing your organization's key priorities, based on its context - and a candid assessment of the current situation and your future ambitions - isn't easy. But thoughtful, responsible leaders can and will get it done.
The fundamental challenges are identifying your priorities, preparing the path to achieve them, and then embracing the plan to get there across your day-to-day operations. However, when well-crafted, and embraced beyond mere plans and process to real ways-of-working, you'll be amazed by the degree of clarity and buy-in that results across the enterprise. And the profound impact this will have on accelerating your momentum toward your goals.