Exactly What Makes a Business Plan Effective?

There is a prevalence of Business Plans doomed for failure in the market place.  Why is this?  And what makes an Effective Plan? Here are some key areas to pay attention to when developing your business plan…

The Right Business Plan Process

There are a lot of examples of a Business Plan Workbook in the market place which attempt to explicate and quantify the Business Planning Process.  Some even claim to be the most “Comprehensive”, “Final”, “End-All and Be-All” Business Planning book.  Some are workbooks or software trying to take you step by step through the Business Planning Process.  Many of these books have lots of great experience behind them and contain very useful information; yet, they lack in the actual execution of a good Business Plan or are way too in depth or technical for the entrepreneur to clearly realise.

Being someone who has been developing business plans for over 20 years, I only know one way to compose an effective Business Plan - from a Comprehensive, step by step process in a workbook, building block fashion. A good planning workbook is understandable, simple and processes all business types and aspects in a step by step, progressive, building block process. But a good business plan workbook doesn’t stop there, it also addresses the Plan’s Implementation, as no Plan is effective until it is implemented and part of your Company performances. Only then can success be consistently attained.

Strong Commitment and Involvement

There must be a strong commitment through out your Company for the business planning process and especially the implementation of the business plan. This involvement must be top down, from the CEO and Executives, all the way to Management and Employees. Good business planning is both top-down and bottom-up, but it really needs the complete involvement of from the upper levels of the company to esnure the rest of company is sold on its importance and process. Upper and divisional management must be willing to adopt the plan and use it in day to day management of the company. No business plan is effective until successfully implmented through out the entire enterprise. Think about building your company operations around the business planning process so it is interwoven into the daily fabric of your company. It must be fully adopted into a company to be effective! A business plan is a tool and needs to be used to be successful. Those in the company who are actively involved in its development should also be involved in its implementation. Business plan development must involve all levels of a business, otherwise, its involvement and commitment behind it will be lacking.

Realistic Short and Long Term Outlook

The Planning Process and its resulting Goals, Objectives, Tactics, Programs and Strategies should address the significant factors which impact a Company’s short and long term implementation. Outlook is just that, a projection. Key influences to Company Performance are identified and developed into an Action founded Strategic Plan, which will in turn increase Growth, Revenues and Performance. One of the underlying Key concepts in a good planning is promoting a Process from the Product Level to the Marketing Level to the Strategic / Performance Level. The Strategic Tactics and Programs the Business Planning Process develops and produces is what will heighten Performance- not blind projections or just “thinking” you can exploit a market.

Forward Thinking

The Planning Process looks backwards for things you have learned along the way which can be applied and leveraged into future success. All the same, more importantly, the Planning Process must be Forward Looking, identifying trends, developments and opportunities in your marketplace and operating environment.  Having a developed Process instilled into your Company’s operations will produce forward thinking results, ensuring you consistently have a competitory Edge and the opportunity to be a market maker and, maybe, a leader. A business going nowhere is one stuck in the past (i.e. past accomplishments) and the status quo, lacking a mechanism within the Company to produce strong forward thinking and predictable Growth.

Company-wide Performance Objectives

Your company’s Goals, Strategies and Performance Objectives should be consistent throughout your entire operation. The Plan should provide a clear picture of your Company’s direction to all your employees, as well as, customers, suppliers and strategic partners, regarding future Performance Goals.  You can’t reach that goal without your people being behind the Process and Plan Implementation. Your Company needs to demonstrate strong Leadership and Accountability to your Markets, Customers, Partners and Suppliers by “owning” your future Performance Goals and Milestones. An Effective Business Plan, when implemented correctly, applies consistent Business Models to an ever changing market so that you can realistically achieve your Future Performance Objectives.

A Process that Constantly Assesses a Plan’s Assumptions

If Key assumptions underlying your Business Plan prove to be invalid, an Effective Plan provides specific contingency planning systems and processes to indicate clear courses of action.  An Effective Planning Process helps you to address significant deficiencies upfront and puts contingent, systematic plans in place to minimize a company’s learning curve severity, while effectively exploiting a changing marketplace.  Uncertainty and unexpected change are a guarantee in business. An effective plan has well developed systems and processes in place to adeptly manage those surprise events, turning a potentially costly experience into a fruitful opportunity.  Through a solid business plan process, you will design and establish a Company Structure which can develop an effective and competitive Product or Service. This Product or Service will be exploited via a well developed Marketing Plan and with success implemented into a winning Strategic Plan, producing expected, realistic, attainable Financial Goals.

Comprehensive and Specific aim Business Plans

An effectively developed Comprehensive and Internal Business Plan lays the solid foundation toward successful attainment of needed Financial Resources through an adapted, External Funding Business Plan.  effectuality starts with the Comprehensive (Internal) Plan, culminating in the viability of various External Business Plans – i.e. Plans for Funding, Customers, Suppliers, Markets, regulative purposes, etc.  A good business plan workbook provides a step by step Process which will produce the Global Plan to successfully run your business.  Other External, supplemental Plans become a snap to “package” from the Global Plan.  It is hard to develop an Effective External Plan without having the foundation of the Comprehensive Internal Plan built.

About the Writer

This article is written by Frank Goley, business consultant and business planner for ABC Business Consulting. Frank is an expert in writing, developing and implementing business plans, business turnaround plans, business funding plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, and web seo, web development and web marketing consulting to small and medium size companies.

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