The Importance of Having a Plan (and some tips on how to make one)

A lot of clients that come to us have good ideas and some real market potential, but are easily stumped when I ask them the simple question, “What is your plan”.  This is a simple litmus test from my point of view which can quickly distinguish between those clients who will likely be good to work with and those that still have some learning to do before they are likely to be successful.

Having a Business PlanYour Plan

In the good old days, the plan I might be referring to is a business plan.  While incredibly valuable for collecting thoughts, understanding financials, and communicating to others the in-depth direction and strategy for your business, it is often too cumbersome an investment to have anywhere near complete when you are contacting someone at the manufacturing level about a quote for your new product idea.  And, truthfully, many businesses have been successful without one and many experienced entrepreneurs never bother to write them.  That doesn’t mean they don’t have a plan though and aren’t focused on a goal.

At any time in starting up or operating your business, you should have definitive plans about the next steps and some long term plans for how you will grow.  I suggest that you write them down and refer to them fairly regularly.  These plans should include action items and expected dates of completion (ie. goals) and as you go through a normal day you should be able to easily answer any questions from others about what your plans are for the business because it should be those plans that drive your daily operations.

What to Think About When Making Plans

The modern world moves fast, so your plans may change regularly.  In fact, they should.  You should be learning new things everyday that give you more insight and better direction to the future.  That’s fine, it’s great even.  There is nothing wrong with changing your plans, as long as you have new plans to replace the old ones.

Product Plan PropositionYour plans should be driven by marketing.  In a business, your ultimate goal is to make money and you make money by selling product, you sell product through good marketing.  At the core of marketing, particularly initially, is developing and understanding your value proposition.  Your value proposition should be at the tip of your tongue at all times.  You should be able to tell anybody that asks you in one sentence why they would want to buy your product instead of your competitors’. Is it more convenient, lighter, faster, tastier, more beautiful, more environmentally friendly…, and your initial plans should all involve proving that enough of the market is willing to pay enough for your value proposition to make the venture worth your while.

Keep it Simple and Concrete

Your plans don’t need to be elaborate, but they do need to be concrete.  They must be actionable.  The actions might need to be a bit qualitative, like “research the science behind metal fatigue to make my product more durable”, but they need to be clear enough to give direction to your daily tasks.  You must also know when they are complete.  In the vague task above, you can use the dates of completion to set a boundary for how long you will allow yourself to spend on a certain task to be sure it doesn’t prevent you from making progress in the other areas of your business.

Time Saving Business PlanHaving a Plan versus Not Having a Plan

I think the main difference in having a plan versus not having a plan is that you save a lot of time everyday in thinking about what you need to be doing or getting distracted because you already know what you need to be doing.  The reality is that our time is extremely limited.  It seems like we have 8 or so hours in a “working” day, but there are a million little things that eat into that time and when your head hits the pillow at night, it can often be those few productive minutes or hours that put you ahead fast enough to succeed with your idea.  If you are losing minutes each day getting distracted by google searches that return websites that, while interesting, are not helping you complete your plan, you are likely losing time doing something that is not helping you make sales.

How I Make Plans

When I begin with a new business idea, I often create what I call a “Business Plan Working Document”.  The top section is my “plan”, which is basically a to-do list of action items with associated dates.  Below that, I begin to fill out the skeletal outline of a business plan.  Over time, that skeleton turns into paragraphs and more concrete ideas and, if all goes well, a complete business plan.  Having this information in the same place is a tremendous help as I can reference the information and reasons behind my action items and adjust them accordingly.

Business Plan Stages

Almost always, the first thing I write in the working document is the value proposition and I am always reworking it and more clearly defining it as I better understand my market and operations.  At any time I can tell you the value proposition for my product as defined that day, my immediate goals, the actions I’m taking immediately, my long term goals and my longer term plans for reaching those goals because I have it all written down and revisit them on an almost daily basis.

I may not have all the answers (or many at all!) or even be going the right direction, but I am always moving forward with purpose and this allows me to answer the questions I have quickly and make course corrections as necessary.  In working with over 700 clients, I can tell you from experience that those with more concrete plans are much more likely to be successful, even if their plans end up being misguided to start with.  So, open up your preferred word processing software, get those thoughts down and start making your plan!

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