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Plan for Success
By Dr. 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 clearer.
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 objective.
THE BUSINESS PLAN
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
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.
THE 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
* Vision Statement
* Mission/Purpose Statement
* Scope of Business
* Goals and Objectives
* Progress Reporting Methods
Every statement 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
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 about it).
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
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 of operation.
3. Add 100 new customers by the end of the first year of
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
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
2. Publish a monthly newsletter for all my customers.
(excellent marketing), and use direct mail to identify potential
3. Develop two reliable parts suppliers. (guard against loss
4. Constantly reassess pricing with respect to the competition
and your costs.
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 loss. 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
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 credi Protect yourself 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 metho-dology for getting there. Take all
the time necessary to produce a well thought out strategic plan.
Plan for your success but also plan for failure.
Robert Sullivan is the author of The Small Business Start-Up
Guide, and United States Government - New Customer!. He
frequently lectures on starting small businesses and appears on
CNBC's "Minding Your Business" as a small business expert. His
books may be ordered toll-free by calling 1 800 375 8439.
Robert also developed and maintains an extensive award-winning
Internet website, "The Small Business Advisor," at
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Tags: Wisdom and Life Skills