be surprising that when you start thinking strategically about your business, you feel that you’re suiting up for battle and jousting with your competitors for the hearts and minds of customers (to say nothing of their wallets and purses).
You clearly describe how to reach the goals and objectives that you set for your company (see Chapter 4 for more info).
You take into account the social values that surround your company and drive your staff, you included (see Chapter 3).
You think about how to allocate and deploy your human and financial resources (see Chapters 12 and 16).
You create an advantage in the marketplace that you can sustain, despite intense and determined competition (see Chapters 10 and 14).
Don’t misunderstand us here: Planning is not always rational science, and business success sometimes can be an inspired outcome of “art.” Some people are intuitive by nature and “go by their gut” more than engaging in a lengthy planning process such as we encourage in these pages. The late Steve Jobs of Apple, Inc., was supposedly one of these creatures. Good for him and them. But let’s be honest: People like Steve Jobs don’t come along often, and the probability that you are one of them is negligible at best. In fact, now that we think about it, Mr. Jobs — one of the most remarkable and admirable business leaders of modern history — could have saved himself a decade of time and boatloads of money if he had devoted a bit more effort to understanding the threat of competition for his original Apple I and II machines. So when that Blinding Flash of Brilliance strikes, grab it and thank your lucky stars. But please don’t run with it until you’ve finished our book. You and all your involved associates will be thankful not too far down the road.
What can you do to make sure your business plan includes a strategy? When it comes to strategic thinking, a healthy dose of plain old common sense and logic works wonders as you pull all the pieces of your plan together. Experience in your industry and some smarts are advantages, too. Unfortunately, we can’t give you any of these gifts. But we can offer you some solid advice to keep you on track. Go to Chapter 14 for more on strategy.
Why planning matters
Planning doesn’t guarantee success, but it does go a long way toward bettering your chances. We’ve seen it with our own eyes. And a recent survey of close to 1,000 small businesses backs up the claim. The survey found that companies that have business plans enjoy 50 percent more revenue and profit growth than companies that fail to plan. It’s that simple.
Always question what makes your company successful — it’s more than mere luck.
Observe customers and markets, tracking their wants and needs.
Relentlessly examine the competition and what progress it makes.
Steadily work at maintaining your competitive edge.
Optimize the organization to rapidly transform if and when change occurs.
Continue to search for ways to take better advantage of what you do best.
Some managers may follow all these tips automatically and intuitively. But if you want to make sure that strategic thinking extends into all parts of your company, you have to create a framework to ensure that it happens. When you make planning a basic responsibility for the whole enterprise, you get the added benefit of including all levels of employees in the process. Employees — especially those closest to the customer — often have different and equally valuable viewpoints about shaping strategy. Having a planning framework ensures that you hear their voices.
Satisfying Your Audience
Whether you write your business plan on your own or do it by committee, always keep in mind who reads the written document. A business plan is meant to communicate your vision and strategy — what you plan to do and how you intend to do it. The best way to convey your message is to consider your audience. You don’t speak French to someone who only speaks Italian, right? (Well, maybe the French do.) For the same reason, you don’t want to fill your business plan with all kinds of techno-jargon if your audience is made up of people who don’t know the first thing about the cool new technology you work with.
What if your whole business idea is based on something brand-new? Don’t you need to describe it in detail? Sure you do. But you can address different audiences within the same document. For example, your plan may include an overview of the new technology that anyone who reads it can understand, and if necessary the techno-speak can go into an appendix. Before you can really think about how to address different audiences, however, you have to know your readers.
For the sake of simplicity, we lump them all together and call them your stakeholders — as in everyone who has a possible stake in what your company does or how it operates. Some of these people may have direct stakes: They rely on you for their income, for example, or they own a piece of your business. Others may have less tangible interests: government watchdogs who occasionally survey you to ensure that you’re complying with legal standards or civic organizations who want to make sure that you remain a good corporate citizen.
Whatever the interest group, your business plan is one of the most important tools you have to communicate with them. But there is a catch: Each of these groups is likely to look at your plan in a different light. So take a closer look at two very important types of stakeholders: investors and lenders.
Venture capital
If you need money to fund your business and you want to minimize your financial risk, one place to turn to is the venture capital (VC) marketplace. Venture capital firms are in the business of raising money and then putting it in the hands of businesses that make
