Business Planning Takes A Road Trip

By G. Michael Homa ©2009
Spectrum Business Consultants

Here is a simple overview of a planning hierarchy: The business plan is the master document that directs all aspects of an enterprise. Yet, many executives fail to fully understand its importance for achieving goals. Too often, the plan is written then filed away and never used as a key tool in managing a business. A good plan is not necessarily about how well it is written - more important is how well it is implemented. Someone once said, “A partial plan implemented well is better than a well written plan never placed into action”. It is very important to use the plan as your guide, but it must also be dynamic under constant revision because the marketplace is not static. Without a plan, how do you know where you are going and how you will reach your destination?

A business plan addresses functions related to product, marketing, operations, administration, finance, legal, and budgeting. Yes, you can argue that more goes into the plan – remember this is just a simple summary. Planning is like preparing for a road trip. You know where you are and know where you want to go, but how do you get there?

Let’s say your trip is several hundred miles long. Studying your map, you ask yourself questions about time and resources needed before you start the journey. You want to get to your destination as quickly and efficiently as possible, but at the lowest cost without sacrificing essentials or your comfort.

Factors to consider for your trip include mode of transportation, cost, length of trip, and best route in a realistic amount of time. What happens during the trip, if you encounter road construction, traffic jams, or even detours? What if your car breaks down along the way? You tried to plan properly in advance, but now you’re faced with unexpected choices. What resources do have at your disposal? How do you tap resources you don’t have now? What are the opportunity-cost to consider? Which options make most sense to keep you moving on?

Planning your road trip, you consider all the route options. Route A is the shortest, but research shows the route is full of road construction. Taking this route will make your journey longer because of delays and it may cost more in gas money because poor mileage efficiency caused by many stop and go driving. Route B is significantly longer meaning it takes more time to reach your destination. However, there are no detours or construction to deal with. You can zip all the way with minimal stops and find the improved mileage efficiency means less gas station stops resulting in cost savings.

These are the kind of factors requiring consideration when starting a plan. After you decide on the route to take, you must now consider your available resources and their capacity to fulfill your goal. In our road trip example, your next considerations will be influenced by a systems check of your automobile – is it road worthy for a long trip? Must you invest in new tires? Is your battery reliable? You get the idea. How much money do you have allocated for gas, food, and the unexpected? Are you doing all the driving and navigation yourself? When do you start your trip after considering your options?

Being realistic with your goals and anticipating roadblocks will assist you in starting your plan. Don’t waste time constantly refining your plan at the start or you will never reach your destination. Just start with the basic elements using research and a little common sense. Risk is part of the game, but you can significantly reduce future risk if you plan, learn, evaluate, and adjust. Adjustments are always necessary because the market is dynamic - so should be the application of your plan. You cannot anticipate every obstacle, but you will be better prepared to resolve issues if you have a plan and evaluate it on a regular basis.