Two business planning dilemmas we observe in the SMB space at the end of every year:
- The Santa Clause Dilemma: Owners think they have a plan and believe that everyone on the team knows the plan. But, no one knows the plan, because it doesn’t exist.
- The World Peace Dilemma: SMB Owners believe that business plans are 75-page documents, put together by PhDs for private equity pitches and SBA loans. Paralysis ensues and no action is taken.
Both dilemmas yield the same result, there is no plan. And 2020 is going to look and feel a lot like 2019…and 2018…and 2017, etc.
Our decade of experience working with SMBs and scientific research agree, PLANNING IMPROVES PERFORMANCE. This was true in a 2010 study of over 11,000 businesses, AND, it benefited existing businesses more than startups. Companies that plan grow 30% faster than companies who don’t. And finally, 71% of the fastest growing companies all had business plans in writing.
See references below.
What should a SMB business plan look like? First, get started with Big Picture Clarity from our blog last week. Next break down your key business components into goals, plans, actions, and assignments. Start with these six:
- Marketing
- Sales
- Operations
- People
- Finances
- Systems and Processes
We would love to help with your planning process. We conduct business planning boot camps once a quarter (less than $500), as well as 1-3 day customized strategic retreats for larger teams.
If you are still not convinced that Business Planning is worth your time, ask Santa for improved performance for your business in 2020. USPS says you can address the letter to Santa Claus, North Pole.
References
1 Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms. Journal of Business Venturing, 25(1), 24-40. doi: 10.1016/j.jbusvent.2008.10.007
2 Burke, A., Fraser, S., & Greene, F. J. (2010). The multiple effects of business planning on new venture performance. Journal of Management Studies, 47(3), 391-415.
3 Upton, N., Teal, E. J., & Felan, J. T. (2001). Strategic and business planning practices of fast growth family firms. Journal of Small Business Management,39(1), 60-72.