Are Business Plans a Waste of Time?

As a business advisor it may seem strange that I should ask that question at all. Don’t all advisors/mentors/coaches stress the need to have a business plan and say things like, “fail to plan is a plan to fail”?

In my opinion it comes down to the type of business plan that is produced and the length of time it takes to produce it. Many business plans ARE a waste of time because they are too wordy, too “corporate”, don’t motivate staff and are not connected to the day-to-day operations of the business. I read an article recently on writing a business plan (unfortunately I can’t remember where) and it said that a business plan could take between 400 and 500 hours to produce. ARE YOU KIDDING! Who in small business ownership world has a spare 500 hours to produce a business plan, and probably one that no one will look at again for another year! Get real. That would be a HUGE waste of time.

What is of real value is the PLANNING PROCESS involved in putting a business plan together. It’s all about the journey, rather than the destination, in my opinion. I do encourage business owners to take some time (not 500 hours however) and examine where their business is at, what went right and wrong over the past 12 months (a SWOT analysis can help here), set some realistic goals for the next 12 months and think about the strategies, budget and tactics that will be required to achieve those goals. Then regularly review progress towards their goals using a combination of monthly reporting and quarterly themes that aligns people’s daily activities.

The output from this process need not be a 50 page document that is put on a shelf to gather dust, but a summary on a couple of pages that remains a living, working document on a constant basis. There are a million planning templates out there that you can use to base your own planning process off. Most unfortunately focus on the end document and tend to result in a long and dusty plan that fails to inspire. One model that I have used with success in several businesses is the 1-page plan (actually 2 if you use A4 instead of A3) developed by Verne Harnish of Gazelles.com.

It takes a bit of time and effort to develop the foundation part, but once you have done that, you can quickly update it on a quarterly and annual basis to provide a short but clear path to guide your business into the future. Here is the link to download a copy of Gazelle’s classic 1-page plan and then you can either go to their website to download a guide on completing it, buy his book, The Rockefeller Habits, that also explains it, or book a planning session with me to fast track you to success in 2012.

Andy Burrows

Business Advisor Phone 09 912-1901