I believe that business plans have been dead for a decade now; however, most people have not caught up to this yet.
I have been telling this story for a long time now, and each year that goes by it becomes more and more relevant.
So I’m going to give you the six main reasons why I believe the business plan is dead.
And if that wasn’t enough, I am also going to blow apart the myth that you need a business plan to get finance from a bank.
It is simply not true.
When banks ask for a business plan, they are not really going to take the time to read it.
I have raised millions of pounds of capital: raising finance is a big part of what I do with business strategy.
But I have not done raised that money with long detailed business plans. I have raised it using decks; a simple presentation on something such as PowerPoint.
People and this includes those at the bank, need to see something that will engage them, not put them to sleep by page 6.
And this leads us into the first point I want to make as to why business plans are dead:
I have asked thousands of people all over the world if they read business plans, and if they do then which page do they head for.
And the answer is that they just read the executive summary. All the rest is fluff and nonsense.
Business plans are a nice idea, but they do not get executed. For me, any sort of formal planning document needs to lead into the following month’s implementation. I truly believe that a business plan without execution is just an idea.
So many times in my early career I asked to see someone’s business plan. They would shuffle around in a draw and pull out a big tome, blow the dust off and present it to me.
Then, quite routinely, would follow the admission that if they had done half the stuff detailed in their business plan then their business would look awesome by that point.
But we write the business plan out of a sense of obligation, it goes quickly out of date, and then we move on without it.
The speed of strategy has increased massively in the last decade. In the eighties your business plan could be around for 10 years and things would not have moved on that much.
Today, the moment you write the plan it goes out of date. Business changes so fast now and we need to be agile.
Without agility and being able to flexibly execute the plan. It can become a futile and dogmatic exercise if we are not careful, business planning is pointless.
Whoever writes the plan will put their own bias into it. If you are a technician and business owner; for example a videographer or a decorator, then you are coming at your plan from the technical angle because that’s what you are good at.
But then you are missing the other angles; the marketing side, the values and talent and so on. The company brand and culture is critical, and if that’s not in your plan then you have missed a critical element.
So often, very little of the company culture makes it into the business plan.
Purpose is always missing from business plans. I have only ever seen a couple, out of thousands, that tell me the why behind the business. If your why isn’t right, then you could be building the wrong business.
Typically, business plans do not break strategy down to what needs to be done month-by-month. And this is needed across all areas of your business.
So what are you going to do this month in marketing, in sales, in operations and finance? What about talent? This needs to be done for every month. This consistency across the spectrum of strategy, and in the now, was always missing from the traditional business plan.
So could it be time for you to ditch the old-fashioned business plans? Let’s face it, most people reading this will hate writing them, so maybe I have just freed you!
But you have got to go to work on getting your business strategy down on a page or a simple slide deck.
Have a plan that is simple to explain AND simple to execute. If you can’t explain it to a bank manager then it is too complicated. And of course, you must be able to execute on it in the now.
My own methodology, Strategy on a Page™, is a one-page tool that takes you through the whole spectrum of strategy.