Using Your Business Plan as a Management Tool

Most small business owners don't understand the value and importance of developing and maintaining a written strategic business plan (SBP). They see taking valuable time out of their business day to develop a written plan as an unncessary task that they don't have time for and don't really need.

I've had many small business owners tell me that business plans are for large companies or for businesses who are approaching a bank to borrow money.  My response to that line of thinking is this:  All companies, regardless of size, should have a written plan.  For small companies particularly, having and using an SBP as a management tool can ultimately make the difference between success and failure.  An effective business plan can save you time and money by helping you prioritize and focus your business activities.  An SBP can give you control over your personnel management, marketing activities, finances and day-to-day operations.

Packaging your business in document form and telling the story of your company in print almost forces you to view your business objectively.  Your plan should clearly present your current position, your vision for the future, including specific measurable goals, and your detailed action plans for realizing those goals and your vision.

As a business consultant, one of the benefits I bring to my clients is that I ask a lot of questions.  By asking questions like why do you ...?, how do you...?, or why not...?, it forces them to not only explain the reasoning behind their process, it challenges them to consider other alternatives.  As a small business CEO, you should constantly be looking at your strategic business plan and asking questions of yourself, and your entire team, as though an outside consultant were asking those questions.

Your written SBP provides a valuable management tool that you can use to clarify and improve every moving part of your company.  It also forces you to measure actual results against written objectives, which, believe it or not, is all too often a key missing link for measuring the financial health of most small businesses.

My challenge to you is to make the commitment to develop or update your SBP over the next ninety days.  I am confident that you will find that the value of getting your entire business operation broken down on paper is well worth the time and energy it takes to do it.  If you decide to tackle the planning process yourself, a good resource is a book by Rhonda Abrams, titled Business Plan in a Day.  This book provides a good frame-work for most small businesses to start from.  Don't be fooled by the title though, you can expect to spend far more than 8 hours developing your plan.