Do Business Well

Not only does the process of writing a business plan differ from situation to situation, but so does the plan’s final form. The rules of thumb described here may seem obvious, but I know from experience that they aren’t obvious to the uninitiated.

1. The earlier in the company’s history the plan is written, the simpler the process. This isn’t to say that it’s easy to write a plan for a start-up or early-stage company, only that it’s simpler than doing so for an established growing business. As Fred Gibbons points out, he was able to write the business plan, get his partners to agree, and everything was done. Mo Siegel, on the other hand, waited until Celestial Seasonings was six years old and had about $30 million in sales before he wrote the first business plan. He suddenly had many people involved in a lengthy and frustrating process that caused one of his partners to leave the company.

2. The earlier in the company’s history the plan is written, the simpler the actual plan. Software Publishing’s business plan is ten pages long, in large measure because, “It’s for a single product and market” and the company had only four partners, says Gibbons. A subsequent plan, prepared in anticipation of several products and markets, was two or three times longer, he notes. Celestial Seasonings’ plan stretches to 135 pages, because the company has about a dozen products and several hundred employees.

3. The plan’s purpose helps shape the content. A business plan aimed at obtaining financing for a start-up will contain different information than a plan intended to guide the strategy and operations of a growing multimillion-dollar company. In the former situation, the audience and its needs are well defined, and the business plan can be sharply focused. In the latter situation, the business plan must address all the constituencies that make up a growing company, including the marketing, sales, production, and finance people. These individuals need to understand both what is expected of the company as a whole and what is expected of their individual areas—a more detailed plan is thus needed.

4. The first business plan is the toughest. That’s because the process is new and intimidating. But as Frank Carney reports, subsequent business plans that Pizza Hut’s management put together were much less stressful, if not necessarily less time- consuming_; with experience, the managers became more comfortable with the planning and writing process.

5. It usually helps to involve your management team. A good way to do this is to assign each manager a section of the plan to write. When you see the drafts, you invariably find that their perspectives and your perspective are miles apart. That’s frustrating, but it’s also useful because you learn where the important differences are and what you need to do to get everyone on a common course.

Keep in mind. . . In writing the plan, you’ll invariably take two steps forward and one step back. It’s an uneven path, fraught with unforeseen frustrations and difficulties. Thrashing out those difficulties is a key part of the planning process.

Possibly related posts: (automatically generated)
How Your Business Situation Helps Shape Your Plan

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• Making a Plan: how to construct a simple and workable business plan part 6
• The Strategy: Playing Historian and Futurist continue...
• Ask Yourself: Would You Invest?
• Packaging Issues
• Assessing the Competition
• Previewing the Business Plan: The Best Type for You
• Personally Presenting the Plan
• What All Plans Must Cover
• Targeting Your Plan

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