PLAN FOR SUCCESS
by Robert Sullivan
Planning is mandatory
for business success. Fail to plan and you plan to fail.
Planning is difficult
because there is no immediate feedback as to its value. But if you think
of starting and operating your business in the same way you might think
about climbing a mountain, the purpose and advantages of planning become
When you start up
the mountain you never know what to expect: sudden change in weather,
lost or broken equipment, mistakes in maps, an injury. Planning for these
eventualities will allow you to deal with them and still reach your objective
in spite of temporary setbacks. On the other hand, lack of planning can
spell disaster. The more careful the planning, the more likely problems
will be anticipated and not allowed to interfere with your ultimate business
Countless books have been written on how to write an "effective" business
plan. The traditional business plan is a very well defined and structured
document. It is written as a presentation to lenders, potential investors,
and bankers in order to raise capital. As such, it is sort of an advertising
document and, well, maybe tends to exaggerate a little.
Although many will
argue the business plan is a planning document, it frequently is not because
of these exaggerations. After a while YOU will start to believe the business
plan ... even if you know that what is contained within the document is
absurd in places. (Yes sir, there is no doubt about it, sales will easily
double each year ... as long as we can obtain adequate financing.)
If your business
is going to require investor capital at the onset, you will need that
traditional business plan. But BEFORE you even get to this point, or if
you are like so many of us and are starting a small business venture where
little or no formal investment is needed, you need another plan ... A
plan for YOURSELF ... A HONEST plan for you. You need a strategic plan.
A strategic plan is your plan for success. It will define your business
mission, your present situation, and where you want to be in three to
five years. A strategic plan, like the traditional business plan, should
be well-structured, and include a number of short succinct statements
covering the following areas:
* Vision Statement
* Mission/Purpose Statement
* Scope of Business
* Goals and Objectives
* Progress Reporting Methods
in your strategic plan will be important since it defines what your business
will be, what your objectives are, and how you intend to achieve these
objectives. If you find you cannot write about the areas that are about
to be discussed, you need to stop and think carefully about your situation
until you can. A strategic plan will allow you to anticipate problems
and to make decisions that will help you meet your business goals and
objectives. Without a clear goal in mind, the best decision may not be
obvious and you are reduced to guessing.
This is a short statement that defines your overall long term goal. This
statement should define WHAT your business will be. It should be brief
(20-30 words) and clearly define your customer base and you're providing.
Too specificand it's not much of a vision; too general and it's unattainable.
Your vision should be something to strive for ... usually a multi-year
Example: Build an
automobile repair business, specializing in Porsche, that will gain a
reputation for outstanding service within the community and will, first
and foremost, always be responsive to customers' needs
This is a definitive comment that tells WHY you are pursuing your vision.
Why do you want to start a business? What do you have to give? Keep in
mind that a lot of people have a vision but very few have a mission ...
At least one they are willing to pursue (many people shared Martin Luther
King's dream but he was the one who also had a mission to do something
Example: Make use
of my background and experience with Porsche automobiles to provide high
quality repair and restoration services; to provide jobs for locally qualified
individuals; to provide for my family's needs
You must define the boundaries of your business. You cannot be everything
to every-body. If the scope of your business is too narrow, the probability
for success may be diminished due to the smaller number of potential customers.
If the scope is too broad, you will never be able to focus on your objectives.
Example: We will
provide our services for all Porsche automobiles with the exception of
the 914 series. Our services will include general repairs and maintenance
(less major body work), detailing, storage, rebuilding and restoring.
It is important to understand what specific assumptions you are operating
under concerning your new business, since they determine and dictate how
your business will grow and prosper. The more specific these assumptions
are, the better. It may require a little research on your part to lay
out these assumptions but the planning stage is the time to do it. It
is difficult to give general examples, but in keeping with our Porsche
repair facility, here are a few:
1. I will keep
my present job for the next 12-months.
2. There is a significant number of Porsche facilities in the area and
they are not perceived as doing a good job.
3. I will limit my involvement to 20 hours per week for the first 12-months.
4. I have fifteen customers that I can start with right now whose cars
require major repairs.
GOALS & OBJECTIVES.
This is a specific list that should include items that can be measured
in terms of accomplishment and attainment. Goals should be realistic and
attainable within one to three years.
1. Be able to
quit my present job within 12 months.
2. Grow the business to generate $150K gross sales in the first year
3. Add 100 new customers by the end of the first year of business.
4. Sponsor a racing team by the third year of business.
Identify as many risks as you can. This might be difficult since it requires
some negative thinking, but it is important for you to consider the downside
in your planning. You must identify as many specific risks to your proposed
business as possible. By doing this, you can more easily plan to deal
with the risks.
1. Possible damage
or loss of tools, inventory, facility.
2. Loss of customers due to the competition.
3. Loss of employee(s).
4. Loss of an important supplier.
5. Loss of lease, requiring a new location and facility be found
Your strategies are the methods you will use to achieve your goals and
objectives in spite of the risks.
1. Sponsor a monthly
"clinic" in which we will provide the use of my facility to members
of the local Porsche club. (generates loyal customers)
2. Publish a monthly newsletter for all my customers. (excellent marketing),
and use direct mail to identify potential customers.
3. Develop two reliable parts suppliers. (guard against loss of one)
4. Constantly reassess pricing with respect to the competition and your
5. Be an employer worth working for ... treat my employees like the
important asset they represent.
A plan written and forgotten does not serve the purpose for which it is
intended. Your business is dynamic - numerous variables that affect your
business are changing constantly and your plan must reflect these changes
and be updated or modified accordingly. Furthermore, you continually must
assess your performance against the plan.
Revisit your strategic
plan monthly and revise and update it as required. Your planning efforts,
if carefully done in terms of assessing risk and the unexpected, should
help you maximize your chances for success. You must constantly update
your plan to ensure it is tracking changes that were not anticipated previously.
If you find, by referring to your planning documents, you are not making
satisfactory progress toward your goals, you must be ready to admit failure.
Pull up stakes and cut your potential losses. Hanging on and watching
your business slowly die does not do you or anyone else any good.
Perform a post-mortem
and assess the failure. What went wrong? Were the circumstances beyond
or within your control? Could the event(s) contributing to the failure
have been anticipated and possibly mitigated?
In the true entrepreneurial
spirit, you will probably be involved in a new business venture sooner
or later and you want to be able to take advantage of your previous experiences.
By spending time performing a careful assessment of your failure, the
lessons learned will be documented for future reference.
Lastly, be aware
of this very important "planning for failure" truism: Pay yourself first
or you may end up with nothing for your efforts.
Do not make the
mistake of putting every dollar of profit back into your business. Your
business may very well prosper for a number of years and then be plunged
into sudden bankruptcy through no fault of your own. If this happens,
and, if you have not planned ahead, you may very well have nothing to
show for your time or efforts. Plan for this disaster by remembering that
YOU are the business and deserve to be appropriately paid for your efforts.
Never forget to pay yourself first. In bad times, the creditors may hound
you, but they will wait.
by placing a certain percentage of your income into a retirement account
such as a SEP or 401K plan. Money in these types of accounts is protected
from creditors. Plan ahead, you won't be sorry!
Fail to plan and you plan to fail. Be the exception to the rule - plan,
assess, and plan some more. You MUST have a clear goal and a well-defined
methodology for getting there. Take all the time necessary to produce
a well thought out strategic plan. Plan for your success but also plan