How To Write A Business Plan; Step By Step Instructions
Another white paper on how to write a business Plan? …. NOT EXACTLY.
I’ve seen lots of very well written business plans that are highly organized, describe broad goals, and set solid benchmarks for measuring success. Rarely have I seen a performance review that measures the achievement of the plan. More often, the follow-up to a business plan is a revised business plan that attempts to update corporate goals.
In general, business plans seem to focus on goals and sometimes strategies to achieve those goals. A business model is usually developed that outlines the business activities and describes how the various components of the business model interact with each other; including internal divisions, the supply chain, and the customer base. All good stuff, components that must be understood, and relationships that must be maintained. And then what?……. Usually nothing. Maybe a company goal setting session, or printing the plan and distributing to key staff, and sometimes “motivational posters” that highlight plan components.
Many businesses with business plans are all about creating that vision in every employees mind of what the business goals encompass. And at the end of the year, some companies will have a check list review of the performance. Wonderful stuff, powerful….. managers can reward success and create a hit list of “things that need improvement”. Blah, Blah, Blah….. BORING…. Where’s the money? After all, isn’t that why businesses are formed…. To make money?
LET’S REDEFINE GOALS
Bear with me and keep an open mind. You may have never thought in these terms… ever.
A Long Term Goal is what you’re going to accomplish by the end of the day.
A Short Term Goal is what you’re going to get done in the next hour.
READ THOSE TWO DEFINITIONS AGAIN, over and over. They are very simple definitions. Can you spot what makes them unique? The Answer: ACTION, yes both definitions require action, what you’re going to accomplish, what you’re going to get done. You’ve got to do something more than visualize…. You must consciously identify a targeted achievement, then, in order to meet the goal, you must do something. Action, Action, Action. You, You, You. Now. Now. Now.
Getting the picture? That’s the kind of visual that a business plan should create. One of You doing something in a short time frame which is easily measured as PASS or FAIL. You either got the job done or you didn’t; no grey area, no “almosts”, no “you did your best”. You either passed the test or you failed the test. If you failed, you will be held back a day, or until you achieve the mission. Just like school, if you don’t take action, study, and pass the test, you’ll stay in the first grade all your life. In business, if you don’t pass every day, you’ll start the next day trying to accomplish what you failed to do the day before. Think about that. How many times have you said to yourself…. “Oh well, I’ll just have to finish tomorrow”. Then you go home, tell your spouse how hard you worked and how hard you have to work tomorrow in order to “catch up”. If you’re playing “catch up”, you failed. Period, plan and simple.
PERFORMANCE OBJECTIVES: a new term to some
We’ll start with another simple definition. A PERFOMANCE OBJECTIVE is a task that you must perform. By example, if you’re a carpenter, one performance objective is the ability to drive a nail into a piece of wood. And from there, we might have a short term goal of driving 50 nails per hour, and a long term goal of driving 400 nails per day. And at the end of the day, I either drove 400 nails or didn’t drive 400 nails; PASS OR FAIL. No excuses, no explanations, just pass or fail. You either did it or you didn’t.
So a Performance Objective must be something tangible and measurable, like making a telephone call. Notice I didn’t say making a sales call, I said a phone call. We’re narrowing these tasks to their basic components. As a salesman, I might need to make 2 sales calls per day, and that can be a performance objective. But in order to make two sales calls tomorrow, I might have to talk to 5 people today to schedule the meeting. And beyond that, I might have to dial 10 numbers before getting 5 people on the phone. And so on, and so on.
Now I’m not suggesting that you set performance objectives for every little detail of your work. Or Maybe I am. The more objectives that you can identify, the clearer your work becomes. Have you ever gone into work, got to your desk and wondered, “Now what am I going to do today?” If you understand performance objectives and have used those objectives to develop a Daily Work Plan, you’ll never ask that question again. You will be programmed to tasks that achieve your stated long and short term goals. The old adage “Plan your Work and Work your Plan”.
DAILY WORK PLAN
This article is about writing a BUSINESS PLAN, right? What does a Daily Work Plan have to do with a Business Plan? If you’re asking that question, you’re already in trouble. Can you convert your magnificent business plan to a daily routine? If you can’t, re-write the business plan.
A Daily Work Plan is simply a daily routine. It’s what you do every day. If you’re an accounting clerk, you make accounting entries. If you’re a secretary, you type. If you’re a salesman, you make sales. You’re daily work plan is nothing more than your daily work routine. The things you do every day in your job. Write those things down. Organize them. Prepare a daily schedule of when you perform those tasks.
And of course, the Daily Work Plan must be detailed. For instance, what will you do between 8 AM and 9 AM every day. Then what about 10 AM to 11. 11 Am to noon? Now you’re getting the picture. What is your job, when do you do it, and how much of it do you do?
Let’s say you’re a telemarketer. You have to get your list of prospects, either handed to you or developed on your own from research. You have to call several numbers in order to find a person that will actually talk to you. Then you have to make your sales pitch and hopefully close a sale. If all goes well, at the end of the day, you will have met your quota. Do you know how many calls you have to make to find someone who will listen? Do you know how many sales pitches you need to make to close a sale? Do you know how many sales you have to make to maintain your job? And lastly, do you find yourself working harder at the end of the day because you “put off” making calls in the morning? Hmmmm ….. of course you do.
Your Daily Work Plan should be designed to force you to get things done NOW. Schedule your activity by the hour. And here’s a tip. As a telemarketer if you schedule yourself to make 10 calls between 9 AM and 10 AM, stop once you make those 10 calls; at least until 10 AM. Take a break after meeting your short term goal. Reward your Success, immediately. And then at 9:59 AM check your Daily Work Plan for the next hour, then get back to work. In theory, that means you make 80 calls a day. Is that enough? If not, ramp your plan up and schedule 15 calls per hour. On a commission schedule and want to make more money, adjust your Daily Work Plan to 20 calls per hour. It’s really up to you.
As simple as it seems, the Daily Work Plan can be difficult to create. You really have to know your job, how to do your job, and organize your day so that the work flows smoothly and one thing leads to another. Since every job is unique and unique to your skill sets, the Daily Work Plan is a custom creation, something just for you. Oh, your boss may give you quota’s tasks, etc. but that’s not your work plan, that’s theirs. It’s up to you to exceed company expectations by doing more than the minimum; otherwise your job is always at risk. And you can get that done with a good Daily Work Plan.
BACK TO WRITING A BUSINESS PLAN
So how does all this information targeted to employees relate to the company’s overall Business Plan? The Business plan should be about what “You’re going to achieve”, not what “You want to Achieve”. In order to write that plan, a company must have a reasonable expectation of what their employees can do.
If one of the “Goals” in your business plan is to increase sales by 10%, the plan must address how that will be done. Will you hire more sales staff? Will you increase quota’s? Will you rely on more advertising for your order takers? HOW? HOW? HOW? That is the question. When I read a business plan, I always look for the answer to that question: “How will you achieve that goal?”. And more often than not, I get lofty flowery words that generally describe the mission or corporate culture. Having a mission and a defined corporate culture do not get the ditch dug deep. The business plan must address in detail the specific things each employee must do in order to achieve the much broader goal of success.
Well, I have kind of hammered the standard business plan. And maybe I shouldn’t have done so. A company is generally successful because it has a well defined mission. Traditional business plans do a good job at describing the mission, no doubt.
Now as a manager, executive or on the front line, it’s up to you to create your business plan for yourself and employees that directly supports that Big Corporate Mission. Read this article a few times, think about the concepts. Then do one thing: Write your own Daily Work Plan and Get to Work. If it works for you, extend a helping hand to your co-workers and subordinates, and teach them how to develop their personal business plan that integrates into corporate objectives.
I hope you enjoyed this brief article on business planning.
Louisiana Business Consultant Daryl Schouest