Many writers and professionals, like Accountants, will stress to you that you should have a Business Plan.  Depending on the life cycle stage of your business, this may or may not be a good idea.

Do You Really Need a Business Plan?

If your business is a Start Up, you have very little evidence on which to base your plan. Additionally, even if you did one, it would be a work largely based on guesstimates.  Alternatively, if your business is in a more mature stage of its life cycle you have a lot more data upon which you can build.

In the early stage of your business you do not have a great deal of concrete evidence on which to build the plan. Therefore, it is probably not worth expanding a business plan in detail. But it is definitely worth spending time on Goal Setting for your business. This is so that you have a very clear general direction in mind by way of a Vision.  If you don’t have some clarity on your direction, you are likely to jump in whatever direction short term indicators take you. Consequently you will lose track of the long term preferred direction of the business.

You should not feel pressured to develop a long-term plan until such time as there is some clarity around your business.  Elsewhere, we write about Start Up phases of your business. It is worth spending some time looking through these elements or suggestions on planning (see Business Start Up menu).

Alternatively, once you have a Plan that you begin to execute religiously you are putting on blinkers. These blinkers encourage you to focus on the direction of the Plan early on. At startup, your Business Plan is almost certainly wrong or incomplete. Putting on blinkers too early in your business’s life may prevent you from taking an alternative direction that turns out to be more positive. Although rapid “pivoting” from one business direction to the next is not good practice by any means, retaining some flexibility to make the occasional pivot in your direction is a good idea.

Keep in mind that:
A business without a path to Profit isn’t a business, it is a hobby!

Track Your Competitors

It is very tempting to model your business on a competitor that has been successful. This is in the hope that you can pick up some of the crumbs from their table.

Although it is increasingly easy to duplicate the processes that your competitors use to get to success, it comes with problems. What are their business plans? It is guaranteed to mean that you will continue to be less effective, efficient and profitable than they will be.

The reason is simple; you will always be tracking them from the rear. So you are setting yourself up to always follow them rather than to lead them.

Much of the reason why they are a success is rather like the “iceberg principle”.  You can only see about 1/3 of an iceberg above water and 2/3 is below and invisible to you.  And so it is with a successful competitor.  While it looks comparatively easy to duplicate what they have done, it is the hidden things that count. Things like leadership, team work and culture that will have made substantial contribution to their success. Consequently, you will find it hard to duplicate; even if you are aware of them.

Lessons to take from your competitors:

Firstly, take what they are particularly good at and focus on just doing one of those things much better than they do.  At least they have indicated the size of the market for areas in which they presently operate. Therefore, they can provide you with good intelligence on a particular sector or subset of those markets.

Secondly, 12Faces have done this in the past. It has been used to identify the areas where a successful competitor is strong and where they are weak. Finally, build a business that addresses all those areas in which they are weak. This is providing there is a business to be done there.

The well-known “Blue Ocean Strategy” book talks about a competitive canvas which maps all the things that are appreciated by customers in a particular industry. It then compares the existing competitors on how well they service those needs.  Where a strong customer need is under-serviced by existing competitors, this opens an opportunity for you to specialise in that area.

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