Business planning made easy
Oct 19, 2009
While I have probably written about business planning in the pages of The Zweig Letter a dozen or more times over the years, it seems necessary to do so again. As you read this, A/E/P and environmental firms throughout the country are gearing up for their 2010 plans. A lot of time will be wasted in this process by many of those companies because they don’t understand business planning and are getting bad advice from their planning consultants. Here are my thoughts: Is it entrepreneurial to do a business plan? Of course it is! Entrepreneurs are not gamblers. They are “calculated risk takers.” And, one way entrepreneurs reduce risk is through planning. A plan does not have to put you in a box, and you don’t have to follow it blindly, regardless of interim results. It is positively entrepreneurial to have a business plan. There are many good reasons to do a business plan. You do it to plot your future, help secure financing, get unanimity among your owners, motivate existing employees, help recruit new employees, sell work to clients, and more. There are many reasons to do a business plan and a well-written plan can serve multiple purposes. “Strategic planning” vs. “business planning.” They are different things. You need both. Strategic planning is all about the philosophical stuff— mission, vision, strategies, values, etc. It has a longer time horizon (three to five years or more). You need that to set the stage for the business plan, which is more concrete and practical. The business plan is all about goals, actions, and forecasts, and has a shorter time horizon (usually a year or less). “Top down” input vs. “bottom up” input. It always struck me as absurd for a company to ask its employees to define the company mission or vision. The mission is why you are in business, and the vision is what you are trying to become. If you, as the owners and top-level managers in the enterprise can’t answer those questions, how in the world will your employees be able to? It is a classic case of “the tail wagging the dog.” Conversely, if top management is sitting around the boardroom table trying to decide what exact steps need to be followed to get the project photography database in Deltek Vision properly organized, there is a problem also. The strategic portion of the plan needs to be top down. The business plan portion of the plan— particularly action items for the coming year— should be much more bottom-up. Consultants vs. insultants. “Con-sultants” con you. They tell you what you want to hear so you like them. They want you to keep them around as long as possible, so they, too, can nurture themselves at the teat of “Mother Company.” They want to be loved and be a long-term fixture at the company. Insultants, on the other hand, are not afraid to alienate you if necessary to show you that you, the emperor, may, in fact, have no clothes. They want to get in and fix the company and get out as fast as they can, to do the same work elsewhere. Their reputation depends on the results they get for their clients, and not on their personal relationships. Management book junkies and their influence over the process. After nearly 30 years of working with A/E/P and environmental consulting firms, I can assure you that I have become acquainted with more than my fair share of management book junkies. These people are always reading a new book that will be a panacea of some sort for every problem the company faces. They are “moving cheese,” or “one-minute managing,” or “servant-leading” like schizophrenic addicts who eat up and regurgitate buzzwords. They can be dangerous because they will derail the business planning process and take you away from the very specific decisions you need to make to formulate your company’s future. Don’t let them take over! What if competitors get a hold of the plan? I want to say, “So what if they do?” Post it— at least the highlights of your strategic plan— on the company web site. Use it like it should be used for marketing and recruiting purposes. The other guys aren’t going to follow your plan. They probably have a different view of the markets, a different set of constraints, etc. Plus, we are in a very uncompetitive business, truth be told. Your plan will work for you and no one else. Share the highlights of it with everyone. And inside the company, constantly bring back the focus and discussion to the philosophies expressed in your plan, the action items you are taking, and the results. That makes it real. 2010 is around the corner. Are you ready yet with your new business plan— strategic and otherwise? If not, you better get on it now! Originally published 10/19/2009
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.