Gerald Grinter

Business Mentor and Author
Seattle, Washington

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Who Needs A Business Plan, It’s All In My Head!

Now we’ve all heard of how people started a business by writing a plan on a napkin. While I don’t doubt that there is some validity to that, let’s be realistic.

Written Aug 11, 2011, read 1902 times since then.

I happened to find an old program of SNL on the television the other night while I was thinking about this latest post. It was Dana Carvey doing an impression John McLaughlin of the “McLaughlin Group” round table program. I couldn’t help but crack up every time someone would ask a question and Dana would shout “WRONG”.

I started thinking about this next question and imagined a business owner asking me this question. “Do you really need a business plan when you are starting your business? I know it’s a loaded question. Now as you contemplate the answer this. I can’t help but flashback to when I wrote my first business plan. And the two things that strike me also make me shudder.

The first thing is, I wrote my plan and never looked at it again until I found it again while moving my business. Second is, how close I was to my original projections. The only reason I really wrote my plan (I thought) was to get a loan to start my business. It was really nice looking and the bank was really impressed with my ambitious numbers. I figured I was done, “WRONG”.

The 5 year projection was right on. Hey, after I found it I didn't need to do anything else. I was on the path of greatness. The truth is, a business plan should be only good for about 3-5 years. Probably 2-4 years these days with the way things change. Then you should write another one. But that's a different article. You should also be reviewing it every year at the least. And if you were my client I’d recommend quarterly. Why, you may ask. You’ve put all of this work into really thinking and writing out a path for you to follow and then if you follow my lead (the first time). You put it into a folder never to be seen again.

It’s kind of like planning a trip to drive from Seattle to Miami, pulling out a map, making note of the route you want to travel with a highlighter, taking notes of the construction along the way, where you want to eat and sleep, folding up the map and putting it back into your desk drawer getting in your car and saying “Here We Go” and drive off towards the interstate. However, this is what some of us do as business owners when we begin our journey as entrepreneurs. We put the map in the drawer. Or better yet some of us don’t even use a map. We use “the force” and just start and when things get sideways we don’t know how, why or what went wrong. After all we know everything there is to know about our business, where it will go and can even tell the future. Yeah, I know…It’s all in your head, “WRONG”.

Your business plan is your guide to really making your business do what you want it to do. From determining who your market really is, to researching what the competition isn’t doing, as well as forecasting sales projections and your expenses. Your business plan should have all of these. Now we’ve all heard of how people started a business by writing a plan on a napkin. While I don’t doubt that there is some validity to that let’s be realistic. I’m sure there are a few businesses that started this way.

Most, probably created the outline for what they want to do and how to do it. Then went back to the office or coffee shop, did some research and wrote out a business plan that they could really follow and use. You should also read your plan from beginning to end. Preferably out loud. I know this sounds weird. But this does a couple of things. It gets you in the habit of seeing your plan as a living thing. I’ve read mine like a story. It also gets you comfortable with talking about your business, the numbers, the plan, your customers and what you are doing next. And if you read it enough times you will begin to memorize your plan and start to feel it. This way as your business evolves, or gets a little left of center you know immediately.

So how long should your business plan be? I mean shouldn’t everyone have a plan that is 30 pages long with graphs and charts? “WRONG”! The correct answer is, it depends on what you intend your plan to do and how big your business wants to be. What I mean is, if you are looking for a bank loan or talking to venture capitalist and angel investors, they like that 30 page stuff. If you and your Aunt Barbara are the only one who will ever see it you may want to leave out the graphs, flow charts and spread sheets and just show the simple numbers.

This probably cuts the plan down to 10 pages or less. I guess in the end, you just need a plan. A map that you can follow and lead you and your business towards success. Now the plan doesn’t guarantee success, but it can help. I heard a rich man once say, “Money can’t buy you happiness, but it can buy a Mercedes so you can drive up really close to it”. Same difference.

Which brings me to my last point. Don’t be afraid to change your plan. If we go back to my map example and the highway you are on has construction and they are making you take a detour, you need to change your route. Right? It works the same way with your business. If you plan calls for something that isn’t working, you need to stop what’s not working and find a different way. Besides contractors don’t like it when you try to navigate your own way through their construction zone unannounced and driving a car that doesn’t have tires the size of Rhode Island. Unless your bringing lunch or snacks.

Your business and your plan are a living and breathing thing. It will grow and mature just like we do. Sometimes fast sometimes slow, and sometimes not when we expect it to. Love your business and it will love you. Till next time. “Bye, Bye” Tell me what you think. I’m interested in your ideas.

Learn more about the author, Gerald Grinter.

Posted by W.M. (Wendy) Gillihan, CPB,..., Seattle, Washington | Aug 13, 2011

I love the visual of finding the business plan years later when you were moving - you are right on. It should a living document. Reminds me that I am do to re-write mine with updated information!

W.M. Gillihan, CPB, PHR
Posted by Susan Straub-Martin, Bellevue, Washington | Aug 13, 2011

Gerald this is a great article and the map analogy is great. I wrote my business plan a few years ago when I was just out of corporate America.

It was nice to say I had one, but as I sat down with the people helping me with my business this past winter, I realized it did not really reflect where my business had taken me.

So I sat down recently and revised it. Some of the original plan still stood up OK but other parts were completely different. So I set about to change the plan.

I am happy to say that it now better reflects where I am headed on that road, there are built in rest areas, places for nourishment and places to rest my head.

But more importantly there is a true path for growing forward. I know as I continue to revise it will only get stronger.

Keep up the great articles. I love to read them. Thanks.
Posted by Richard Gabel, Issaquah, Washington | Aug 15, 2011

Gerald,

Great article and I hope everyone reads it. A business plan is what gives you courage in hard times. You've thought it through and have determined a course that will get you where you want to be. Go back and look at your map regularly to see if you've gone off course or found a better way.

My business plans tend to grow with age. I make them the repository of everything I run into that seems meaningful for me to know in running my business. Market data, competitive information and useful notes on technology trends end up in my plan. It forces me to keep feeding my living document.

Well done.

Marketing and consulting to help your business grow!
Posted by Nancy Barnett, Denver, Colorado | Aug 15, 2011

I agree with the other posters. Great information. A business plan is a "living document" and therefore is subject to change. I belong to a networking group that forces us to further develop a yearly business plan and then report on it quarterly. It really holds me accountable because the plan doesn't end up in a drawer gathering dust.
Posted by Greg Hill, Seattle, Washington | Aug 15, 2011

Interesting article and reminded me of my own experiences. While working for a Fortune 500, I worked 24/7 to create the plan of all business plans. The binder contained enough pages to level a small forest. Problem was it quickly was relegated to sitting on a shelf. Something was WRONG. I have realized the problem was not the plan, but the notebook. That's right, a binder full of great information is not a road map. Executing on possibilities requires an entirely different type of tool, one that works the way your brain works, and enrolls others. Without a better tool, plans will continue to just gather dust.
Posted by Gerald Grinter, Seattle, Washington | Aug 15, 2011

Great comments! It's great to read about everyone's experiences.

@W.M. I'm glad my article was able to jump start the process and help you create the next step for your business.

@Susan, creating a plan that you can use and one that speaks to who you are as a business owner and give you the momentum keep going and find solutions when things change.

@Richard and Nancy, I love it. Ones business grows with age. If you plan to run your business for many years then you will. Just like an oak tree.

@Greg, So true. Creating a plan that sounds like you, points you in the direction of creating a business that is "you" and fosters the believe that you can actually execute it. It is such a different mind set.

Thank again for such great comments. Best of luck with all of your businesses and may you enjoy spectacular success.
Posted by Randal DeHart, PMP, QPA, Lynnwood, Washington | Aug 18, 2011

Gerald,

I agree whole heartedly about the value of a documented business plan.

Warm Regards,

Randal

Contractors Accounting And Bookkeeping Services
Posted by Nancy Meadows, Kirkland, Washington | Aug 18, 2011

I love the Mercedes quote! I also agree with you about having a business plan. I've never liked the term so I think of it as a map, as you do.

I've recently separated my year into parts. What I want to accomplish in 3,6,9, and 12mos. Under each 3 mo. period, I write down what I want to accomplish in order to reach my annual goal. This keeps me on track, and I'm able to check off each task when completed. Scratching things off my list is important to me psychologically because it demonstrates that I'm moving forward. Throughout the yr. I'll probably change things on my list, but this keeps me mindful of the entire picture.

Thanks so much, Gerald, for your insightful article.

www.nancymeadowsdesigns.com
Posted by Kimberly Gauthier, Marysville, Washington | Aug 19, 2011

Great thoughts, Gerald I created my first business plan, 3 pages, just to get an idea of what I needed to do to get where I want to be in 3 years and I was stunned.

Now that I know what I need to do, my business is really taking shape, because my plan helped me find the right path.

And now that I have a plan, I can see that friends who are struggling with starting their business haven't taken the time to make a plan for themselves. It really is a game changer.

Kimberly http://www.kimberlygauthier.com
Posted by Gerald Grinter, Seattle, Washington | Aug 19, 2011

Nancy and Kimberly,

Thanks for sharing great comments. @Nancy, I cracked up when I first the Mercedes comment. But it's so true. Breaking down the year into parts is brilliant. It makes following the plan simpler. You are focusing on the immediate while working on your year. @Kimberly, isn't it amazing what happens when you write a plan you can actually use. Whether it's 3 pages or 30. You wrote one and followed it. I love it. I'll leave you with this quote.

"A fool with a plan can outsmart a genius with no plan." - T. Boone Pickens

Have a fantastic weekend

Gerald Grinter Helping You Get Out Of The Way Of Your Business
Posted by Brian Jaeger, Seattle, Washington | Aug 23, 2011

"RIGHT!" I so appreciate the manner in which you animate conversations which under academic conditions dull our senses. Another potential BP topic to address: discovering entrepreneur's learning styles. The mountainous paragraphs, 30 page style worked for an attorney, while a more graphic bullet-rich approach was preferred by another. Bottom line, plan the work and work the plan!
Posted by Gerald Grinter, Seattle, Washington | Aug 23, 2011

Brian, thanks for your great words. I like that idea for the continued thoughts on this topic. I might just have to go there, as we all absorb and communicate information differently. Continue to work the plan. Have a great afternoon.

Gerald Grinter / Helping You Get Out Of The Way Of Your Business
Posted by Elisha Weinberg, Bellingham, Washington | Aug 24, 2011

These are all great thoughts (especially love Nancy's idea) that ALMOST convince me to get my thoughts out of my head and onto paper....but I do have a question...one I've actually had for the eight years I've been in business...

I'm a healer. In booming times, I have great business....Done. In times like these...it really doesn't seem to matter what I do...So, I'm curious when I get these ideas out of my head, onto paper...what actually changes?

Now remember..there is a stereotype about healers and in this case I sorta fall into it...(i'm a healer, not a business person...did I just identity my main problem?)

If you could give me a some caffeine jolt of wisdom and a magic template that makes me actually get one of these plans done....I would be much appreciative (And so would my MBA father who has been trying to get me to do this for years :)

Great thought stimulator Gerald!
Posted by Gerald Grinter, Seattle, Washington | Aug 24, 2011

Hi Elisha, I glad you liked this. I hope I can help convince you a little more and make your MBA father smile in the process.

I can appreciate what you mean about your profession. I've seen this a lot lately. I have some friends who are healers as well. The truth is, tough times like this is what plans are made for. When you get your ideas out of your head and on paper it gives you a chance to spread it all out on the floor and evaluate what worked in the past and what's not working now so you can change it.

Probably the first place to start would be your past clients. They love you already. They say it's easier keep and market to the customers you already have than to go get new ones (it's cheaper too). What then starts to happen is they begin to refer you to their friends.

What I usually do before I let my clients even write a plan is to have them write a story about the type of business they want, they type of clients they have (and want), how they want to take care of them and how much money they want to make (and I mean as detailed as possible). Then I have them read it to me out-loud and then re-write it. Then writing the plan is easy. And if they don't ever write a plan (which they always do) they have the core of a business plan they can follow. With this, if things don't go according to plan they know it.

Now here's the second part that most of us have trouble with. And I mean "MOST" of us. It's thinking like a business owner. I call it the "Entrepreneurs Blind-spot" We know our industry, but when it comes to the nut's and bolts of a business our eyes role back into our head. Let's face it. There is always something we don't know (or how to do it). Don't beat yourself up about it, I'm there with you. I think I learn something new everyday. The information is always out there. From the internet, to YouTube, to colleagues and mentors. To really make your business thrive you sometimes have to learn to do some hard stuff (or pay someone else to do it for you).

And the last part is, there is no magic formula or special length your plan has to be. Just write something. Even if it's just a list of things and ideas you hope to accomplish for the next year. Let me know if this helps. May your business thrive and be successful.

BTW...I'm having a workshop tomorrow afternoon in Bellevue if you have time and would like to attend. I know it's short notice. I've also written a few articles that may help. Thanks again for sharing your story.

http://biznik.com/events/plan-all-the-way-to-the-end-whats-your-business-plan-0

Gerald Grinter / Getting You Out Of The Way Of Your Business
Posted by Nancy Meadows, Kirkland, Washington | Aug 24, 2011

Elisha, I'm an interior designer but I have to be a marketing person first. It's taken me a long time for that to sink in. Without marketing, I have no one to design for. The same goes for you. The idea is to keep the pipeline full so there are no "feasts and famines." That means spending time each workday working on marketing. That means scheduling. My marketing mentors have all told me there are only two areas to concentrate my time: working with clients and marketing for new ones. Much of we do to run a business can be outsourced.

I write things down, because it's the only way I can stay on track. I break it up into small sections of time, because I'd become overwhelmed otherwise. However, sometimes that happens anyway!
Posted by Elisha Weinberg, Bellingham, Washington | Aug 25, 2011

Gerald...those are great ideas. I especially like the idea of writing a story about your business. As a writer, that's always an excellent way for me to manifest...and when it's not a "business plan" which seems unfriendly and human-less and a story which can be sweet and dreamy and fun...that's a really different energy.

THAT is an idea I can get on board with!

Nancy, I totally agree with you. Coming up with interesting (and for me low-pressure sells) for marketing when I have an hour between clients would be potentially a better use of potentially future billable time. That pipeline bit is what I'm currently working on. How to be full and have a little waiting list, but also make sure I'm available for those who need me now....

I would think after 8 years I would be better at this--as Gerald said, there is always something new to learn.

Thanks for all your feedback. I love this conversation and how it puts me in my business skin. I hate to admit that actually feels good :)
Posted by Gerald Grinter, Seattle, Washington | Aug 25, 2011

Elisha, Excellent! I love it. I know your story will be fantastic.

Nancy, you rock! Thanks for your insight. Good stuff.

Gerald Grinter / Getting You Out Of The Way Of Your Business
Posted by Elvis Arias, Jersey City, New Jersey | Dec 23, 2011

Great thoughts Gerald! I enjoy the way you write the article, it keeps me entertained and brings your topic alive! Thanks to your ideas I'm focusing wholeheartedly on my business plan!
Posted by Paul Setti, Charleston, South Carolina | Jan 26, 2012

HI Gerald,

I read your article to help me figure out even what a business plan is! I mean I know I hear people who are starting a business say they've written a business plan, yet I have not. The more I try to follow what's "in my head" the more I realize i'm not organized. Thank you for the the article. It has helped me to figure out that I need to learn how to write a plan step one and remind myself to follow up and adjust as needed as time goes by.
Posted by Ebenezer Mantey Oduro, Accra, Sakumono Estate Ghana | Jan 28, 2012

Gerald, thanks so much for this article. It's "food for thought" I realise using my Business plan only couple of yeas then later kept it in my office desk when business went from starting to the greatness. I have since not gone through it. So very WRONG! Never late. Your counseling in well noted. thumps up!!!