Business Planning Myths – Busted
Business Planning Myths – Busted
Strategy Consultant in Pune
Business Strategy Consultant
Eha management consultancy
I am trapped, can you help?
Sam called me fanatically, “Sachin, I have decided to quit my job and start a business. I have heard many stories where successful entrepreneurs said they didn’t had any plan for starting a business. I am also thinking on same line of not to have a plan, what do you think?” Tina’s message on WhatsApp was “Sachin, my company’s growth has stagnated. I have been assigned a task of coming out with ideas to put our company again on growth path.” Jenny was complaining through LinkedIn message that “I can’t take this stress of pushing my company’s business plan anymore. It seems, I am the only one who is interested in it and nobody else cares about it. In a top management review meetings, I am always questioned about progress of business plan but those who should support the business plan activities are not questioned!” Julia said in an email “Although we are part of Government, our superiors now want better results. Their demands are like the ones you have in a large Company. But we are a Municipal Corporation, we are not a business. What can I do?” Sid in a Facebook message said “The Non Government Organization (NGO) I work is spread across the world. We deal with Governments, Governments agencies, businesses, and so on. Now my boss is demanding results in a scenario where I can’t predict results. The situation is so ‘business’ like that I don’t consider anymore that I work with a ‘NGO’.”
Since I got similar phone calls, WhatsApp messages, Facebook Messages, LinkedIn messages, and Emails on same topic from my friends. I decided to get them together and answer their queries at one go.
Different blends, similar expectations
I was meeting my friends after a long time. When we were studying together, we were unaware of the paths we are going to take. When we met at a café – Sam, Tina, Jenny, Julia, Sid and me, we wanted to know each other again after number of year’s gap.
Julia ordered Turkish Cappuccino, Jenny ordered Iced Caramel Latte, Tina ordered Coffee Lush, Sam ordered Ferrero Rocher Shake, Sid ordered Peach Ice Tea, and I ordered Ginger Honey Lemon Tea.
We decided to have round of fresh introductions. Sam recently had embarked on journey of entrepreneurship with Start-up in Software Product domain. Tina was working with a midsized manufacturing company. Jenny was working in a top management of leading multi-national company. Julia was working with a Municipal Corporation. Sid was working with Non Government Organization (NGO) working in eradication of diseases globally.
After the individual introductions, I briefed them about how all had contacted me with similar problems. I said, “Now I am going to bust Business Planning Myths. You will find answers to your questions in the explanation.”
Business Planning Myths
1. Business Plan is required only for Start-ups
Business Plan is plan of conducting your business. It has nothing to do size of the business.
Businesses of all sizes need a Business Plan.
The ‘business’ may be a Corporate, Government, NGO, or any other type of organization.
2. Business Plan is only a Calendar of Activities
An outcome of a Business Plan design can be a Calendar.
Business Plan is much more than Calendar of Activities. It is the way your organization is going to conduct its business.
3. Individuals drive Business Plans
Business Plan involves running of your overall business. Since you can’t run your business alone, same rule applies to Business Plan, you can’t run it alone. For driving a Business Plan, you need a team. Even if you are working independently, still you will need support from your suppliers for running your business effectively.
4. Business Plan doesn’t require Funds
For achieving results, you need investment.
Nature of the investment can be monetary and non monetary.
5. Business Plan and is a periodic activity, nothing else
Although Business Planning is periodic activity since it involves Functional Planning, it is continuous optimization.
6. Business Plans are superficial
Business Plan can’t survive without support of the Operations. Operation needs defined Processes.
Technology has become integral part of the many Processes.
7. Business Plan doesn’t takes into consideration Offerings
Your offering, which is Products/Services you provide, will be important component of your Business Plan.
Offerings can accelerate, break, and in some cases can even put you in reverse gear.
Pricing is important dimension of your offerings and in turn will have impact on your Business Plan.
8. Business Plan should work without Business Environment consideration
We don’t live in isolation. Similarly, our organizations also don’t leave in isolation.
We are all part and Business Environment.
Two of the important parameters for understanding Business Environment are Global and Local Business Environment.
9. Business Plan ignores infrastructure required
Business Plan can’t work without proper Infrastructure.
By Infrastructure I mean Hard and Soft Infrastructure. We need to estimate the nature of Infrastructure required to support effective execution of Business Plan. Procurement and maintenance of the Infrastructure will provide smooth operation of the business.
10.Business Plan is single activity
Business Plan includes number of activities. These activities bundled together are called Projects.
Projects are building blocks of a Business Plan.
You can execute Projects with internal resources or you can outsource some projects also.
11. Business Plan should not be restricted by Budget
Funds are total of how much money is in your pocket/bank/etc.
Budget is a specific amount of money you have identified as an investment in executing your Business Plan.
You need to follow a systematic method for designing your budget. Make sure to plan for contingencies also.
12.Business Plan is not a time bound activity
Business Plan is a time bound activity.
Calendar is a tool for identifying timing of the activities.
We need to identify objective based themes for the calendar. We can improve efficiency in Operational control with having a Business Plan Calendar.
13.There is no need to monitor execution of Business Plan
Reviewing your Business Plan periodically will increase its effectiveness.
We need to identify method of the review and plan the review mechanism.
14. Business Plan you design is should always be correct
No matter how much work you have put in designing your Business Plan, there will still be gaps.
To avoid major gaps, we should Test the Business Plan.
For the Test, first we need to identify scope of Test. We will have to run iterations of different options while testing the Business Plan.
My friends went on to make necessary changes to their thinking about Business Plans. What about you? What are your thoughts about Business Plan? I would be eager to hear from you.
Author: Dr. Sachin Bhide, Founder & Strategy Consultant, Eha Management Consultancy firstname.lastname@example.org
This article was published in Sampada Magazine of MCCIA, December 2016 issue