Business plans are generally useless.
When I tell my clients this, I am usually met with bewilderment and confusion (though sometimes with vocal agreement too). I mean – aren’t plans what are at the core of business coaching? Isn’t that what we do at the strategic planning day?
You see coaching businesses in London over the last nine years has really brought home to me the truth of business planning. It is the process of creating the plan – not the plan itself – that is of real importance for business owners trying to achieve growth.
That is just one of the subtle shifts of thinking that business owners need to continually work on to take their businesses to the next level.
Coaching business owners across a range of sectors, I found three flawed ideas about business plans that come up time and again, which, when corrected, can improve a business owner’s effectiveness dramatically.
Flawed Idea 1: A business plan is just for Christmas
One of the biggest misconceptions organisations have about their business plan is that it is there just to tell shareholders, investors and lenders that the company is headed in a good direction and that business owners have everything under control.
People think a plan can be written at the start of the year and, once it has been seen by everyone who needs to see it, it can be filed away, where it will gather dust until the next stakeholder asks for an update.
This is not actually where the power of the business plan lies. Sure, it is part of their remit, but, as the name suggests, business plans are there to help you plan your future. They offer a key opportunity to explore your business’s objectives, strategies and forecasts in detail, so that you can achieve and stoke growth.
A business plan is not about the finished product – it is about the process of creating it, as this is what enables you to measure and assess your business. In fact, a business plan is never really finished: it should be constantly updated in line with changes in the market, industry or business landscape.
Flawed Idea 2: Keeping it in your head
While it may feel that way on those late nights you’re working at the moment, no successful business owner is an island. Keeping your business plan in your head and not seeing the need to write it down is typical of the kind of business owner who has no stakeholders (or up until recently hasn’t had stakeholders).
However, even if you don’t have stakeholders, most businesses eventually get to a point where they need to have a team. Without a written business plan, your team members cannot have any kind of input on the plan. While it might seem to save yourself time and boost your own efficiency, keeping a business plan in your head can be detrimental to the growth and revenue of the overall business.
According to a survey by the Kauffman Centre of Entrepreneurial Leadership, companies with written business plans achieve 50 per cent more sales growth and 12 per cent higher gross profit margins than companies without them. The reason? Because the written plan gives you, and your team, clarity on where you are headed – which automatically aligns everyone in that direction.
Flawed Idea 3: The blame is all on you
When business owners realise that they have not achieved their growth goals, they often blame themselves. They think that the reason growth has slowed is that their approach is wrong, or that they haven’t been putting in the hours and rolling back the sleeves. They aren’t doing the hard work required to keep the growth up.
The answer then seems to be, to push themselves harder and run faster on that treadmill. They put in more hours than they promised their family they would and they start researching mindset principles.
In the vast majority of cases, though, the reality is that business owners of businesses that have reached a successful level of stagnation have done so through blood, sweat and tears. There isn’t more to put into it. What has actually happened is that they have not created an efficient business plan, or the business plan does not involve the implementation of new systems and techniques to facilitate growth.
Instead of thinking you are the cause of the business’s stagnation, you need to return to your business plan (or write one!) and ensure that you have a focus on creating the systems that will not only keep your business running, but will also facilitate growth.
Of course, there is a lot more “head-trash” around business plans than the three I’ve mentioned. That’s where getting the guidance of a business coach can be really helpful – we’ve seen time and again what kind of business plans help take businesses to consistent and sustainable double-digit growth, and which ones just end up sitting on the shelf all year. And I think you’d prefer the former!
Do You Need a Better Quarterly Plan?
Our business coaching in London involves quarterly intensives where we roll up our sleeves and work with businesses to develop a clear plan for the next quarter.
You can attend alongside our clients and see how we help them grow and win award after award for their exceptional growth – and learn how to achieve that growth for yourself.