Business Planning

Why do you need a Business Plan at all?

A real small business Business Plan (as opposed to a "proper" business plan) is all about one thing only — PERSONAL CONTROL.

Control is the most fundamental issue for human beings. Our entire existence — and our recorded history — is a never-ending quest for control over all aspects of life.

There are four critical keys* to gaining and keeping personal control:

1. Definition

You can never control what you can't define for one very simple reason... you haven't a clue what you're talking about or dealing with if you can't define it.

The lifelong dilemma for most people is their inability to define very much at all. Ask most people to DEFINE WHY something works and they'll DESCRIBE HOW it works, in exhaustive detail.

It's not the same thing.

One is about cause and effect — WHY. The other is merely about the effects — HOW.

In terms of human performance – including business – a definition should be a succinct statement of cause-and-effect. Example: "Business is the exchange of resources for profit".

2. Correct Perspective

You can never be in control of a situation until you can gain the correct perspective — the big picture that reveals the cause-and-effect relationships involved. Only then can you see all the ramifications and begin to influence the outcomes, predictably and desirably.

3. Balance

What we're talking about here is the necessary balance between competing interests. Predictability is the essence of control. But there's no point having a predictable outcome that's undesirable.

For example, let's say you're baking a cake. The recipe (the plan for a predictable, desirable result) calls for three cups of flour. You only have two. But you have some cement powder, so you substitute that instead. You now have an entirely predictable outcome. But — unless you have a very odd sense of taste (and teeth made of something resembling titanium alloy) — it's not a particularly desirable result. So what's the point?

Take it a step further. The recipe says to bake the cake for 45 minutes at 300ºF. But you have to go out in 15 minutes, so you crank up the heat to 900ºF for just 15 minutes.

Once again, the result is entirely predictable... but hardly desirable.

At the most basic level, a Business Plan is a succinct set of DEFINITIONS for your business. It defines cause and effect relationships (it also describes those effects and how to create them).

It's also a set of CORRECT PERSPECTIVES about your business and its relationships with others, inside and outside the business.

And it gives BALANCE to everything you do, ensuring both predictability and desirability in all aspects of the business' operations.

4. Purpose

We're not talking here about our business mission – why we're in business in the first place. That will give us our overall direction. But everything we do in our businesses should have a specific, measurable, achievable, relevant and timely purpose that serves to achieve our overall mission. (But don't get me started here on "Mission Statements" – most of which are a meaningless mish-mash of vagueness and 'warm fuzzies' that do little more than confuse everyone.)

So why should YOU have a Business Plan?

In almost anything you can think of, it's not just WHAT you do that's important. WHY and HOW you do it often makes the critical difference.

For example, take selling.

Selling is WHAT you have to do to make profit. There's no other way. Unless you can sell something for more than it costs you to make, buy or supply (any fool can sell it for less — it takes no talent or skill at all), all you have is more product or service than you need or want, and less money than you had before you bought, made or supplied it. Not a profit.

Most people shy away from selling because they don't want to be seen as pushy or manipulative. But pushy and manipulative are WHY and HOW you sell (your motives and methods), not WHAT you do. Truly successful sellers are never pushy and manipulative. That's why they enjoy the repeat and referral sales that make them so successful — and profitable.

So consider your reasons — your motives — for creating a business plan in the first place. In my previous article, I outlined the Secret of Small Business Success: "Do ONLY the right things, ONLY for the right reasons".

The truth is, it really doesn't matter whether you do the right or the wrong things in the long run, if you do them for the WRONG reasons. And, since most of us can't define the right reasons, we go right on doing the wrong things for the wrong reasons — or the right things for the wrong reasons – by default. The outcome is much the same. We work far too long and too hard for way too little money... until we eventually go out of business.

For a detailed exploration of this dangerous phenomenon, visit our dedicated web site and download the FREE Special Report... http://www.thelawofsuccess.info

Most business plans we see at The Profit Clinic are a waste of time for that reason alone — they were done for the wrong reasons. Their bankers demanded one with a loan application, they need one to get VC funding, their accountant said it would be a good idea, or they read something somewhere about how important it was to have a business plan.

Here's the glaring truth about the vast majority of small business "business plans"...

They're nothing more than a sales pitch for money!

If that's your reason for creating a "proper" business plan (a sales pitch for funding), you don't have a REAL business plan at all. What you have is just one facet of one of the sub-plans of a REAL business plan!

If you get the funding you're seeking, you can file it in a bottom drawer of book shelf, use it as a door stop or any other trivial or pointless purpose. Just DO NOT try to use it to run a successful business! You will FAIL. It will be like trying get to your destination travelling on only the spare tyre of your vehicle!

There's only ONE valid reason to have a REAL Business Plan… to get control of your business so that the outcomes are both predictable and desirable.

Now that we've identified WHY you need a REAL Business Plan, let’s look closely at WHAT an effective Small Business Plan should contain. Then we'll examine HOW to do it in the most productive, profitable way possible.

But be ready for some shocks. (Especially if you thought that BIG Business always knows what it's doing.)

The Principle of Keys Most people – especially in business – have never heard of the Principle of Keys, yet it's absolutely critical to your eventual success. It says... "At every stage of every process there are unseen barriers. Until we can identify each barrier, identify and obtain the key that will unlock that barrier, and identify and master the action that will turn that key, that's where we'll stay – running on the spot, treading water, spinning our wheels, going flat out and getting nowhere, idling our motors, banging our heads against brick walls and glass ceilings, and all the other too-familiar syaings we have to describe this all-too-familiar situation." (Back to the four keys...)

  Next... WHAT an effective Small Business Plan should contain

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