Planning for Yourself vs. Planning for InvestorsThere's a big difference between creating a business plan for your personal clarity vs. creating a plan to attract funding. Most of the business planning information I've seen in books or online is heavy on the latter side. If you don't need outside funding, you can probably ignore 30-50% of the typical suggestions for what to include in a business plan. There can be value in doing some of the work that it would take to impress an investor. Thinking through the financials is a good idea, but in practice a lot of what goes into an investor-based plan is actually persuasion as opposed to serious planning. Financial projections can be incredibly subjective, and you can't predict with much accuracy what's going to happen under real-world market conditions anyway. Overplanning is also a waste of time -- you need to guard against filling your plan with irrelevant details that simply won't matter one way or another. I set financial goals for my business, but I don't bother making predictions which are merely guesswork. Instead I spend more time planning how my business can adapt to whatever conditions may occur. My business plan is created solely for me, and to a lesser extent, for those who work closely with me. I'll never show it to an investor or banker because I'm confident I can continue to grow the business with a strategy that requires no outside financing.
Thinking StrategicallyBusiness planning helps you think strategically about the road ahead. You only have so much time each day, month, and year to make decisions and take action. For many business owners those actions are chaotic and unfocused. They start projects they never finish. They miss opportunities by failing to act promptly. It's very easy to hit a plateau and get stuck there for years. A clear, committed strategy helps to cut through all of that. It sharpens your day to day choices. It provides an intelligent framework for action. The problem, however, is that there are many valid strategies for growing a business. You will undoubtedly have more opportunities than you have time to pursue them. You can't do everything well. If in the back of your mind, you're oscillating between several different primary strategies, you'll have a hard time growing your business if these strategies don't mesh incredibly well. I could grow my business in a variety of different ways. I could blog more often. I could write more books. I could expand into videos. I could expand my workshop offerings and begin doing them in different cities. I could invest in more marketing and PR. I could do guest blogging and accept more interview requests. I could get back into podcasting. I could start a membership site or paid subscription service. I could hire a few personal coaches and open a coaching program. I could turn my blog posts into products to sell. I could expand my social media presence. I could launch my own affiliate program (for workshops and future products). I could do more joint venture deals. We could do any or all of these things, and many of them would be effective. But we can't do all of them well. We might be able to do one or two of them well at any given time. Thinking strategically requires deciding which fronts not to open. To create a practical and realistic business plan, I had to make some tough choices about which directions not to pursue. At first glance, almost everything looks golden. But with some deeper probing and a lot of analysis, I could discern which opportunities are truly the best relative to the others.
The Planning ProcessPlanning is an iterative process. In many areas you won't know the best decision to make. At best you'll be able to identify some options, but you won't have much clarity about which possibilities make the most sense. The way I resolve this is by taking a stab at each part. You can't leave things in a wishy washy state, or you'll end up with no workable plan at all. You have to keep pushing towards resolution and convergence. A good way to do this is to force a decision in a particular part of your plan. Then see how it fits. If it doesn't feel right, yank it out, and try another possible solution. Repeat till you get it right. Planning is an exploration of the potential solution space. To find the right combination of products, pricing, marketing strategies, staffing, and more, take some guesses and see what the big picture looks like. Then notice how those different elements mesh together. It's much like creating a song. Choose some notes and sequence them together. Then listen to the result. Does it sound harmonious? At first it probably won't. But what's creating the disharmony? Can you identify one misalignment? And can you fix that? Then you keep tweaking and listening, tweaking and listening. Write out each new idea in great detail. Then read it back. Sometimes you'll get inspired ideas. Sometimes you'll have to use a lot of perspiration, testing multiple ideas to find the right one. My business plan is only 23 pages, but I probably wrote at least triple that to create it. For some parts of my business, intelligent solutions were fairly obvious. But in other areas, the right approach wasn't obvious at all. My first stab produced a lot of text, but when I stepped back and read it within the context of the rest of the plan, it wasn't harmonious. Perhaps my website would be delivering one message, but my products and pricing were likely to be incongruent with that message; the predicted consequence of that disharmony is that my business would end up attracting people who'd resist being customers -- not a very sustainable approach. This is a really important point to emphasize. To achieve convergence you can't just sit and ponder until the right idea pops into your head. You have to take some guesses and run with them. Take a stab and fully document how it's going to work, as if you've already made your final choice. Then look at it within the context of the rest of your plan. Does it seem harmonious? Does it support the other areas beautifully and elegantly? My major rule here is that if it doesn't feel elegant (or sound harmonious, or look beautiful -- take your pick of modality analogies), it's wrong. I know I have the right solution when a wave of awe washes over me, when I have to get up out of my chair and pace around so I can just be with that feeling for a while. Then I know I've figured out a key piece.
Deep HonestyDeep honesty means being able to look at what you've planned and answer these questions:
- Is this an intelligent approach?
- Is this an honest approach?
- Is this a loving approach?
- Is this a strong plan, or am I caving to weakness and low standards?
- Is this a harmonious plan? Is it elegant and beautiful?
- Will this be a path of continued growth for me?
- Is this a courageous path, or am I playing it safe?