Tear up your business plan - not!

The notion that a business plan is outmoded seems to be gaining force in some quarters. But actually it turns out that it is not exactly that business planning is outmoded, the critique it all about the approach and the words used to describe the planning process.

Goal setting, testing out ideas, mapping processes and the like are all still in the mix and in my book these are all business planning tools.

It is true that the business plan need not be of door-stopping proportions and should always be a live document. So yes, small is beautiful – but it is still important to plan.

The plan should never dictate to you – you dictate the plan so it is a fallacy to say that the plan is a straight jacket that restricts your flexibility – it is as flexible as you want it to be.

Nor does it necessarily need to be one document – it can be a set of tools that you use to plan and monitor your business as it grows.

There is a huge difference between the dry corporate approach to business planning seen in the public sector and in large businesses and the approach that should be taken by small and medium sized business owners. Those that decry the institutionalized nature of the business plan are often mixing up these two worlds.

One of the critical areas that must be fully worked through is the pricing of products and services. It is surprising how many businesses out there are selling products at a loss and they don’t even realize it.

When this is pointed out and it is suggested that prices should go up there is often concern and worry that clients will be lost. Yet by selling at a higher price a business can afford to lose some clients and still be more profitable. This is where financial planning comes in.

Business Talent runs Plan Your Own Success Introductory Workshops and Write That Plan four x half day workshop program to help business owners and entrepreneurs put some planning behind their business ambitions.