Business Planning from 20,000 Feet
Jun 25, 2007
Most of us could benefit at times from a new perspective. This is especially true when you start considering the subject of business planning in A/E/P and environmental consulting firms.
But a new perspective is not always that easy to get. While your employees and co-workers might find it funny to see you standing on your desk as Robin Williams suggested his students do in the movie, “Dead Poets Society,” there are easier ways to get a new view. Following are some ideas you can use to better understand where you’ve come from as a company and to help chart your course for the future.
Know why you are doing a plan in the first place. Just because one of your junior principals went through an executive MBA program at a local business school— and told you the firm had to have a business plan— is not a good enough reason to make one. Good reasons, however, include a real desire to build consensus on where the firm is heading. Another good reason is your bank— smart ones want to see the business plans of the firms they lend money to. Another good reason is ownership transition. It is hard for me to imagine doing an ownership transition plan for a company that has no business plan. There are many good reasons. The important thing is to HAVE a reason— not just because you are supposed to have a plan.
Take a fresh look at the markets you serve. Consider the three Ms— market demand, market size, and margin analysis. Do you know what is driving demand for the services your firm provides? Do you know how large the total market is for what you do in the places you can actually serve? Do you know how profitable it is to serve this market (or these markets)? All of this must be known to do a proper plan. It will impact your decision making. For example, if you are struggling to hire good people (and who isn’t?), why wouldn’t you want to know what markets of the many you serve yield the best margins?
Talk at length with a few of your current clients vs. sending out a survey to all of them. One good, in-depth interview with someone who has actually hired your firm to do a project is far more valuable than some anonymous survey responses. You can learn a lot from that buyer. Spend enough time with them to really understand them. Then go out and find more just like them!
Document and challenge every single assumption in your plan. Then ask (and answer) what you’ll do if any of them turns out to be wrong. Your plan is out-of-date the moment the ink used to print it dries. You will do a much better job responding to crises IF you have thought how you’ll respond in advance. And A/E/P firm business plans are loaded with assumptions— assumptions about revenue targets that will be hit, assumptions about people in key roles that will work out, and assumptions about offices or other business units’ performance that will be achieved.
Build the plan around value creation. I know it sounds like another MBA-driven cliche, but if your plan shows specifics about how your business will create value for your clients, owners, employees, suppliers, and communities, you will design a much healthier organization than someone who never considers these things. It’s the only real reason that any firm exists, period. You have to do something that someone wants.
In closing, I will share with you what is supposedly an old Chinese proverb that I learned of only recently. I think this describes the business planning conundrum perfectly: “Vision without action is a daydream. Action without vision is a nightmare.”
Originally published 6/25/2007
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.