Business Solutions

Many facts about business plans never change with time and are basically set in stone, including the processes of preparation that remain the same for most business models, methods of research might differ, but research still needs to be accomplished, and a financial feasibility must include projections based on sound assumptions, and this leads to a statement that should be made right away to get it out in the open, and that is the fact that no business plan is ever 100% dead on accurate, but of course, I can guarantee 100% that having no plan is absolutely never the right thing to do either, so as a result it’s important to examine the actual results of the business compared to those projected in the business plan.

Most plans by their nature are wrong, and yet vital, it’s an unexpected and surprising thing to hear especially if you have never put a business plan together, so after making a statement like that where else do we go, except to the very core of what business and strategic planning is all about.

Let me start out by saying that those who are deeply involved in plans prepare projections that many times are incorrect, and no one I know even came close in predicting the steep plunge in the global economy in the fall of 2008, so it goes without saying that those who are deeply involved in business planning processes around the world have been going through a lot of changes, adjustments and corrections, and multiple reviews and revisions.

So you see why my opening statements about needless ineffective business plans, and yet their importance starts to make sense, especially as we look ahead to the rest of this year, many sober forecasts are still in the review and revision process and reflecting the current reality of the global economic situation, which always brings up the question why do we do business and strategic planning in the first place, is everyone just wasting their time developing plans and forecasts? Now the answer should always be obvious that although the results are inaccurate at times, how can we determine where we are if a map hasn’t been produced to show us how we got there, and of course, more importantly, where we are going?

If when you review your plan prepared in the past couple of years, of course the results should be greatly different from what actually took place, you should compare the two in detail and look not only where the differences are, but where the “greatest differences” exist, for example, where expenses were tied to sales, where sales performed as expected or didn’t perform as expected, and look for how all the numbers were supposed to tie together, not just why they didn’t.

Now, if you are like the many thousands of global entrepreneurs that did not have a plan, then this might be a really good time to get the process started in order for you to develop and have a much clearer and concise view of your future business and the direction it is heading, and you should start by making some simple projections for sales, costs and expenses, and at this time don’t worry about whether they’re wrong or not, just try and make sure that you check each month to determine where and how and in which direction the numbers were incorrect so that you can correct and make adjustments to the information, and the benefit of this whole process should bring you much closer to the action of what is taking place in the local and global markets, and greatly increase your awareness of the actions you need to take in a more timely fashion to increase your success, and your intimate understanding of the details of your business will grow exponentially.

By implementing the review process on a monthly basis, if you are wrong you are only wrong one month at a time, and as you use the plan comparison to actual results and associated analysis to see more closely what is happening exactly, the accuracy of your adjustments will improve, and in the future, results will be much more accurate and in tune with market activity, and you should see a pattern of monthly improvements.

These implemented planning and analysis steps will put you in a much better position to forecast more accurately when the markets should start to improve, as they will at some point, and you will be able to use what you learned in the process to recognize the signs, anticipate what will take place, and plan your actions accordingly.

So although the results of your planning may be wrong and inaccurate, it is still a critical key to successful business and an essential tool for successful global entrepreneurs, as they learn that in addition to preparing an initial strategic plan, an important part of the process is making necessary changes and adjustments in determining how to recover in the most effective and efficient manner, and how would you know what steps to take in the recovery process if you didn’t prepare the business and strategic plans in the first place.