Ask SCORE: What’s the key to having a good business plan?

A: Embrace the process, not just the plan. 

by Ken Sethney, Kitsap SCORE

Strategic planning isn’t just an option for small businesses today; it’s essential. Given the uncertain direction of some trends and the rapid pace of change in others, every small business needs some kind of roadmap by which to navigate these shifting environment and the right metrics to accurately gauge progress towards business goals.

But while most small businesses know they have to plan, few know how to do it correctly.

Writing in American Express OPEN Forum, management consultant Les McKeown says that while he’s seen virtually every type of strategic planning process, “many times, those involved in the process place too much importance in the resulting plans, and far too little in the planning process itself.” McKeown, president and CEO of Predictable Success, explains that the point of planning is “to develop an understanding of what’s likely to happen in the future and to be fully prepared for most circumstances.” 

To make planning a powerful, vibrant process in and of itself — and get better plans as a result — McKeown suggests the following:

Embrace the process.

“See the planning process itself (not the resulting plan) as the main thing,” he says. “Invest time to do it right. Get the right people in the room. Ask a great facilitator to help you. Roll around in the process. Luxuriate in it. Get good at it.”

Having people who really know your business and its capabilities in the planning process is critical to creating a comprehensive plan.

Do a SWOT analysis on your business. Take the time to examine the strengths and weaknesses of your business. Look at your capabilities and your business environment. Where are the opportunities? What are the threats?

If you don’t know who your competitors are, check in with your local branch of the Kitsap Regional Library and ask for help finding the data.

Plan to scenarios, not data points.

McKeown believes that most people produce plans with a specific outcome in mind, or a “bad, better, best” range of projections. “Sadly, life doesn’t play out in single data points—it plays out in scenarios,” he says. “When you’re planning, start by putting together four or five likely scenarios as well as a few unlikely scenarios for your business next few years.”

As an example, consider what might happen if a key cost rises in a down market, a main customer starts buying from the competition, or you outgrow your existing store capacity. “Plan against these, and rehearse your likely responses so when one of them does happen, you know precisely how you’re going to respond,” McKeown says.

Bring the accountants in at the end.

Most people start with the numbers — say, a 10-percent growth rate — and work backward, something that rarely happens.

“Make your scenario-based plans first, then have the accountants work up the numbers,” McKeown advises. “When you see the results, you might need to go back and re-plan your responses to some of the scenarios, but that’s a good thing.”

Don’t rely on incomplete information to plan for the success of your small business. Set up an appointment with a SCORE Mentor and/or go to the SCORE’s website for business templates and tools and online workshops.

SCORE is a nonprofit organization of more than 12,000 volunteers who provide free, confidential business mentoring and training workshops to small business owners.

For more help with developing your business plan, contact SCORE — Mentors to America’s Small Business. SCORE is a nonprofit organization with more than 12,000 volunteers who provide free, confidential business mentoring and training workshops to small business owners. To contact Kitsap SCORE, email kitsap@scorevolunteer.org, call 360-328-1380 or visit kitsapscore.org.

Ken Sethney is a volunteer business mentor and branch manager with Kitsap SCORE. He is a former ad agency creative director and marketing coach who worked with the owners of midsize companies throughout the U.S. Contact Ken via email at ken.sethney@scorevolunteer.org.

Do you have a question to Ask SCORE? Send us an email… kitsap@scorevolunteer.org

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