Thursday, July 26, 2012

Business Planning: What horses know that cowboys don't.

I love working with entrepreneurs and start ups for one reason. It is a time of absolute freedom and possibility. Like a horse running free, we stretch our imagination on the open road of what's next. It is exhilarating, exciting, terrifying and rewarding.

When we start a business, we first tend to focus on the product or service that we think we should be delivering. Our focus is on how to make money.  So we put our energy into getting the product into the market and find customers who want to buy it or use the service we are offering.

At the end of the day, that exercise of developing the menu of products, services and prices does not a business make.

The business is made by the way it is constructed - with the vision of a defined future in mind.

I always say that a business should be built in its desired state from the beginning. For example, if you envision centre of well being and wellness, then the business plan must be about what would sustain that centre in its envisioned state as opposed the "here and now".

It needs to tell the story in a progressive and logical manner that begins at the end with the vision, expresses the day to day focus (the mission), the way the participants interact and act (values) and how it stands out in the market place (strategic positioning).

The plan must explain the environment in which the business functions so that risks and opportunities can be identified.  The plan must have goals that focus on the areas that will make the business successful - like its people and culture, focus on clients, business management and financial sustainability. Within each goal, measures are set, risks are identified, objectives are set and strategies formulated.

Plans are road maps that chart the future course and help you to control and manage your money and your message, and inspire your staff, your customers, your suppliers and maybe even your mother.

Some people say the plan is in their head. To that I say, that's great if you don't need anyone else to work it with you.

Others try to run their business cowboy style and hope for the best with no vision, strategy or structure.  That's a bad idea. Failure is imminent because customers, suppliers and employees will revolt, your time and money will begin to work against you, your quality and product will suffer, and then the bottom line crashes.

So before you get on that horse and ride, remember that starting at the end is the only way to begin in order to create a business that has a chance of being successful.

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