How To Write A Business Plan: 5 Step Process

How To Write-2

In the realm of business planning, many business leaders start with, and sometimes end at, doing a budget.  Others spend countless hours crafting a comprehensive plan for the next five years, mapping each move they will make based on their expectations of the future, only to drop it in the drawer to be referenced the following year – at best.  Others simply skip the exercise in totality.  Why?

The Problem With Planning?

It relies too heavily on prediction.  The best laid plans falter when business happens.  Unexpected events change the context of our business which requires adjustment.  As the months roll on, the plan becomes less and less relevant.  Our ability to predict these changes mirrors my predictions of the Chicago Cubs. (THIS is the year tho!)  MotherG’s business is technology.  Change is lightning fast, and the changes revolutionary.  Our service must constantly adapt accordingly.  But change isn’t limited to IT.  Consider how 3D printing might change the contract manufacturing industry, or how electronic medical record mandate has changed technology for medical practices.  And on and on.

Planning That’s Alive

So, how do you create a plan that will actually guide the business?  Consider our planning metaphor.  Rather than trying to get better at predicting the future (seriously, the Cubs!), we try to “Drive Better”.    If we can’t predict what is around the next bend in the road, learn to drive better so we can handle the inevitable obstacles and potholes in the road.  Sure, we try to see through the trees to get a sense of what’s coming.  But we focus on the driving – rapidly adjusting to the new conditions.

Here’s how MotherG drives better.  Based on the very powerful methodology, Rockefeller Habits by Verne Harnish, we follow a 5 step process of planning.

5 Step Planning Process

  1. 3-5 Year Vision. We start with what we anticipate our business to be in 3-5 years.  This is a rough picture, giving us general direction.  (Think – head west to California to arrive this week.)  In this view, we try to see the macro changes that might affect our business. For example, the Cloud will certainly change business technology infrastructures.  With this vision, we identify some rough objectives that fit this view.
  2. 1 Year Goals.  Now we move more specific to the year ahead.  What do we intend to achieve in our business today?  (Think – Let’s get to Des Moines today.)  With team consensus for the organization, we define departmental goals for the year.
  3. 90 Day Action Plans.  With our goals defined, we focus 100% of our energy defining the discreet, tangible results we must achieve in the next 90 days.  This defines our action plan, with detailed tasks that achieve the results.  (Think – let’s take Interstate 90, and stop for gas at Iowa City.)
  4. 5 w/ #1!  Action plans cannot have more than 5 items, and ideally about 3.  Further, one (#5) of the items trumps all others.  (Think – Drive 75 mph.) Each action must be specific enough that we:
      • Know what must be done.
      • How to measure the progress.
      • Know when we are done.

Armed with the plan, each department then focuses 100% of their energy in completing the #1.  Once they have done as much as they can on #1, they can move to the next item.

  1. Weekly Updates. For the remainder of the quarter, we meet weekly to review our progress on the action plan, identifying any “stuck” issues. (Think – We should be passing Moline, IL by 2pm, but I got a speeding ticket.)

With short term plans, we have enough time to make substantive changes to the business.  Since we are generating new plans every 90 days, we can iteratively adjust to the changes in our market.  MotherG has achieved dramatic changes and excellent results accordingly.  It’s essentially made us race car drivers in the business planning arena.  And we are starting to win the races!

 

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