9/8/11

On Your Mark! Business Planning (Part 3)

The Business Planning series will posted on Tuesdays Wednesdays, and Thursdays through the month of September 2011. A number of business planning issues will be addressed in the blog. For more detail, depth or individual information and answers, please contact Soltys, Inc. Comments and questions are welcome. We will post answers and responses.




Once you have completed your preparations, you are ready to write the plan that will propel your business forward, so you are on the mark, ready to go. Right? Not so fast. There are two key things to be decided before you begin.

What type of plan are you going to write? Who will need to review, work from or be accountable to the plan? When will the plan begin and how does it transition to the next period. Do you have periodic reviews and potential corrections scheduled into your management systems? What format will you use?

These questions, if not answered before beginning the process, will lengthen the work and or require additional work if not suited to your objectives. The term business plan is well understood as a concept but there are many variations that must be considered.

Most likely the plan that you present to your banker will not look much like the plan that you will use operationally. Plans written for selling a business do not look like business continuation or growth oriented plans. Deciding the purpose of the plan often determines format and material to be included.

Perhaps these stories from real business planning work sessions will be helpful. All are from good sized, established companies.

Company 1 – Instructed all of their divisions to bring together key people with their business plans for their units. The work session had been planned to take the information from the unit plans and roll up to a divisional plan. Each of the key people brought their interpretation of the request – one in PowerPoint, one in Excel and one in Word. There was little similarity in information, determination of objectives or supporting data.

Company 2 – This company gave direction to the managers of each of their locations to submit a plan addressing recruiting, production, revenue, and profit. The plans submitted addressed each of those areas as requested. Rather than showing strategies and tactics, the plans were written to cloak the weakest areas that the manager really did not want to address. Great hiding places were created with little opportunity for roll-up or accountability. Again, these were all in different formats.

Company 3 – This is a company that is going through very large growth plans and has worked to realign the infrastructure of the company to facilitate meeting future goals. Each of the 25 business units bringing a plan were eloquent in addressing their part of the business locally with little though or strategic planning to the company objectives.

Company 4 – This company, owned by a person seeking an exit strategy from the business, was written more like that of a new company working toward high growth. That was a great plan but required significant infusions of cash and did not address the changes of ownership or retention of cash that would have made more sense.

Company 5 - The senior management of the company needed to address management and location issues. Rather than working toward those objectives in the plan, they asked the persons who would soon be released from duties in the company to write a plan for a location that would no longer exist. The people who were to be let go or repositioned are still there even though the locations are gone. Costs for personnel have not met plan in three years and there has been no growth in the areas under those people.

Company 6 – Initiated talks in a merger strategy and had written their plans in full anticipation of a successful merger. The deal died and there is no viable plan in place.

Company 7 – Each year there is a business planning retreat. Everyone works hard and there is a lot of synergy. Ambitious goals and awesome strategies are created in prose that is worthy of a writing and number crunching award. Once written, each year, the plan is put on the shelf like a revered book and there is no accountability.

There are many stories that include successful business planning. The vignettes are meant to stimulate thought as you get ready to plan. Take a look at the prep information in yesterday’s post Ready, Set, Prep! There is also some gathering of docs and information and questions to be considered. To assist you we have created a Business Planning Prep Worksheet for download. Next week we will start diving into plans.

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