Are they really necessary for success?
FOR THE AFFIRMATIVE:
Owner, Pippa Colman and Associates Solicitors
In all the time that I have been in business, I have never heard of anyone arguing against having a business plan. Yes, it is essential for success – because, without your plan, you won’t have worked out your goals, and you won’t know if you have achieved them or not.
Some people are cautious about doing a business plan as they think that it is a comprehensive and complex process, resulting in a rather large document that occupies a couple of ring binder folders and that it takes on a life of its own and is an arduous task to update it, etc.
I prefer the “Keep it Simple Stupid” principle – that is, my business plan is just one page (well maybe two). It identifies our overall strategic goal and objective and I break my business down into 4 areas – financial performance; the people in the business; my clients; and my operations (anything that doesn’t naturally fit into the other categories). It clearly identifies goals and objectives within these categories and the key elements of the operational plan that needs to be actioned in order to achieve the desired outcomes. And it literally is one page that I can keep handy with me and I can easily refer to it when making strategic decisions. I tend to review my plan monthly to check we are making progress and if anything within the plan needs to be changed, or to identify areas that we need to focus more on.
Remember a business plan is not set in stone. It needs to be flexible so that you can adapt to new opportunities or defend yourself against emerging risks. So a nice simple plan that is easy to adapt and change as you progress makes it even more valuable as a management tool.
Some time ago, I read an article by Alan Gleeson who has a standard response for when he is asked – why is business planning so important? He quotes Lewis Carroll who wrote Alice in Wonderland. There is a scene where Alice comes to a fork in the road and asks: “Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to” said the Cat.
“I don’t care much where –“ said Alice.
“Then it doesn’t matter which way you go” said the Cat.
So yes I think a business plan – no matter how comprehensive it is – needs to be in place in order to identify your success in business. Without it, it doesn’t really matter what you do with your business.
FOR THE NEGATIVE:
Managing Director, Italic Graphic Design
Business today is dramatically different from 10 years ago let alone 100. The rise of technology has allowed for instant global communication, stronger access to specialised talent and even rapid prototyping. However, when we look at the business plan, very little has changed over the course of time. I see these plans as archaic and believe that they are inhibiting in today’s world. This isn’t to say that l think they should be scrapped but simply adjusted.
Having a business plan doesn’t necessarily determine the success of a business, but it does provide a stronger understanding for the owner to work towards achieving success.
If you download the free Queensland government business plan template, you will see that even before adding any content you have a 37-page document. Although this has a lot of beneficial sections to help guide you through the creation of a business it can greatly inhibit growth as it is extremely laborious to complete, let alone maintain on a regular basis.
With the increased pace of startups launched globally and the fact that in the first 3 years around 60% of businesses fail, having no plan can be as fatal as planning too much. It is because of this that l believe a business plan must be agile just the same as a business should.