Productivity. Performance. Success

Your Business Plan should be more than a “Sales Document”

Your business plan

If you are a CEO or an entrepreneur, you are expected to come up with a business plan.  As a CEO, the strength of the business plan has major influences on the level of trust you will get from your board of directors, especially if you are “new” to the organization. If you are a founder of a start-up, a well-written business plan is a must if you need funding to grow your business.

Despite this, many CEOs and entrepreneurs take this process lightly. It takes time from the “real” business; and it often feels more like a “sales document” than a realistic plan for the business.  But instead of looking at the business plan purely as a sales document or necessary evil, we can see the business planning process as an opportunity to “stop and think” and get our priorities right.

 

“In preparing for battle I have always found that plans are useless, but planning is indispensable.”

Dwight D. Eisenhower

 

I have found that the process of planning (as Dwight D. Eisenhower would put it) is “indispensible”.  It forces you to stop and ask critical questions about your business.

The first group of important questions is related to the purpose, or the very existence of your business – Why do we exist?  What value do we offer to our clients?  How do we make money?

The second group of important questions is related to execution – Do we have the right people? Do we have a clear management model (who is accountable for what?)? Do we have a clear connection between performance and rewards?  Do we prioritize our use of resources? Do we act as we say? Do we act fast enough? Do we mange potential risks? Do we keep things simple?  Do we measure the right things?

I agree with Percy Barnevik (the former CEO and chairman of ASEA Brown Boveri (ABB)) that “strategy is 10 percent Vision and 90 percent Execution”. The business plan can be an essential management tool to set objectives and priorities for the business. But in order to be so, it must be more than a “strategy statement”, or “sales document” for potential investors. If your business plan is not supporting the execution, the day-to-day work, the value will diminish considerably.

As a CEO for the last 12 years, I have been responsible for developing a business plan every year. I have been fortunate to have some really smart and experienced people on my board of directors; and I have also had many opportunities to present business plans to bankers. I have improved over the years and I believe we have written some pretty good business plans that we can be proud of.

Having said that, I haven’t always been successful in the implementation of the business plan. I have made three mistakes that I think are very common.

 

1) I started too many initiatives that were not clearly communicated to all staff.

If you are a leader, you need to define a few (3-5) clear initiatives and ensure a disciplined implementation of those initiatives. Ask yourself if your business plan can be summarized into a few key initiatives and if these initiatives have been communicated clearly to all employees.

 

2) I failed to define what we were NOT going to do.

 As Michael Porter rightly pointed out, “the essence of strategy is choosing what not to do”. Look at your market segmentation, product portfolio, marketing mix, sales activities, then ask yourself – what are we not going to do?  

 

3) I focused on what before who.

Execution is the result of hundreds of decisions made every day by people acting according to the information they have and their own self-interest. If you don’t have the right people or your people don’t know where you are going, you will probably fail in your execution.

If you get these three things right, you will beat your competition every day, because most of your competitors (if not all) will get this wrong!

Leave a Comment

13 Comments

  1. Faudzli Faudzli
    August 22, 2015    

    There’s no doubt business plan are the most important document in any business engagement.

    “If you fail to plan, you are planning to fail!”
    – Benjamin Franklin

    But what more important are the content of the plan itself, as you have well mentioned. Communicating the plan to all level will ensure success in the implementation, so that everybody are putting the effort and smartly working in the same direction constituting best synergies among members. Then “focused” on the area of interest.

    • Jonas Lind Jonas Lind
      August 23, 2015    

      Faudzli, I agree. communication is critical and often ignored.

  2. August 24, 2015    

    I totally agree with point number 1. I think all information about the organization must be communicated/transferred clearly to all the staff and not only for initiative in our business plan.

    • Jonas Lind Jonas Lind
      August 26, 2015    

      Suhaimi, thanks for the feedback!

  3. August 24, 2015    

    I would agree with Faudzli comments, However, we usually mixed our shot term and long term business plan. We always brainstorming for a yearly business plan which in the end, the plans do not have any continuation between them to achieve your long term goals. Plan the bigger picture and focus on yearly goals. And continuous communication to put everyone align and be on the same page.

    • Jonas Lind Jonas Lind
      August 26, 2015    

      Shariman, good feedback. I think many organisations can learn a lot by reading old business plans and discuss what happened.

  4. Azzad Ariffin Azzad Ariffin
    August 24, 2015    

    “What we’ve got here is failure to communicate” – a famous quote from a movie and more famously by a rock band. People who sit face to face everyday sometime don’t communicate, thinking they already know what need to be known. We may have many ideas in our head but
    unless it is expressed or at least implied, it will forever remained an idea.

    Same with initiative. If its not conveyed to the actual person doing the work, it might not
    even get off the ground.

    As for defining things NOT to do, on a different scenario like a project environment, we have project scope that defines what we should do. Maybe we should expand it to include what we should NOT do as you have finely pointed out.

  5. Amirulzaman Amirulzaman
    August 24, 2015    

    Business plan is not a common thing for me as i’m from the technical team. However the article shows the important of business plan with do’s and don’t which i believe will be useful for me in the future. This is a great article and it’s always great to learn new things.

  6. Mohamad Zahary Mohamad Zahary
    August 24, 2015    

    I agree with Suhaimi salleh. Imagine if the information are communicated/transferred clearly to the staff, the business will be out of sync and no one would be certain of whats going on. In other words, a lack of communication would cause serious efficiency problems, and at the end of the day that’s money out of the company’s pockets.

    • Mohamad Zahary Mohamad Zahary
      August 24, 2015    

      * Imagine if the information are NOT communicated/transferred clearly to the staff.

  7. Aga Aga
    August 25, 2015    

    Thank you for sharing.

    I would like to go through one of your successful Business Plan, which was bought by investors :)

    • Jonas Lind Jonas Lind
      August 26, 2015    

      Aga, I will share one with you.

JONAS LIND is a co-founder of two IT companies, one in Sweden and one in Malaysia. He has been in the IT industry since 2000. He currently resides in Malaysia with his family.

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