John Knotts | President and Owner of Crosscutter Enterprises — Your Success Incubator.
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Every day new businesses start and fail. The percentage of business failures is staggering. Thousands of people are researching why a business fails, and many reasons are given.
However, there is but one reason why your business fails. You!
Ever notice that people will always say “My business failed” but never say “I failed in business”? We look to a plethora of reasons for business failure. Previously, I leaned toward one root cause: poor (or a lack of) strategic business planning. Then I realized that the reason a business lacked planning was that the owner failed to plan or planned poorly.
The crazy thing is that every business owner knows that they should have a strong strategic business plan, yet many still refuse to build one. Many business owners will tell you that they have a plan, but when asked to see it, they hem and haw. One of the following four things are going on:
1. They do not really have a plan.
2. Their plan is in their head and has never been written down.
3. The plan they have built is a half-completed business plan template.
4. They built something years ago that has been filed away on a computer and never looked at again.
A lack of strategic business planning is a result of a lack of effort on the part of the business owner. If you are a business owner without a plan, then maybe you deserve business failure.
If you are looking in the mirror right now and realizing that your lack of effort could cause your business to fail, then you have the opportunity to fix this today!
Failure: Going It Alone
Strategic business planning is a lot easier than one often thinks. However, the first failure of a business owner is not asking for help in building a strategic business plan.
Business owners who have extensive experience in strategic business planning have no problem building their own plans. And their businesses thrive as a result. But going it alone without knowing what you are doing leads to failure.
Drop your personal pride and ego, and seek assistance to build a solid plan!
Failure: Filling Out A Template
Do an internet search for business plan templates and you will surely be overwhelmed. It is not that templates are bad, but the behavior a template drives may be.
When we download a template, we simply start filling it out. This is a mindless exercise of simply answering very broad questions. The actual act of “planning” is so much more than just filling out a template.
A template should be considered a structured guide to planning discussions, not a questionnaire. Examine several planning templates. Consider the headings and material required. Then use the template as a guide for your strategic thinking and discussion.
Failure: Not Thinking Strategically
One of the biggest challenges with a business plan is that it lacks execution. A business "plan," for the most part, documents an as-is business today.
The strategic part of a strategic business plan is what brings life to the plan. Strategic in this case means “in the far future.” Strategic operates on a vision and closing a gap between now and that vision of the future.
So often business plans are written as-is, and they drive little to no action. In the worst cases, a plan paints a picture of a business that does not exist and does not outline any way to get there.
A strategic business plan must begin with the strategy. This includes a mission, purpose, vision, values and strategic goals. The goals outline where the business needs to be in the future and what it needs to look like.
Everything else in the business part of the plan is focused on the actions required to achieve these goals.
Failure: Not Using The Plan
The biggest failure of some business owners is to build a great strategic business plan and then not use it every day to run their businesses. To build the plan and then operate every day without it is a wasted effort.
These are three things you should do with your strategic business plan.
1. Annual Planning. Using your plan as a guide, determine what aspects of the plan you will implement for the year. These items should be moving your business closer to achieving its strategic goals.
Once you have determined what you want to accomplish in the coming year, determine when in the year you want to see this finished. Staging the completion of strategic business activities throughout the year helps avoid an overload of work.
Once each item is staged, then backward-plan quarter by quarter and outline your quarterly activity. Ensure you are not trying to do too much each quarter.
2. Quarterly Planning. At the end of each quarter, leveraging your annual plan, lay out what you want to accomplish over the next three months. Again, watch for an overload of work.
As you progress through the year, things will adjust. Some will finish quicker, and others might take longer. Every quarter, you adjust your annual plan to compensate.
3. Weekly Planning. With your quarterly plan outlined, each week you should identify actions to take that achieve your planning expectations. This way, your day-to-day is filled with strategic activities and not just daily business as usual.
The completion of these strategic activities will energize you and motivate you to work harder every day, week, month, quarter and year.
Do not be the reason that your business fails! Create and implement your strategic business plan today.
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