Another powerful mind-set for taking your business to the next level is to throw out your old business plan and build an entirely new one from scratch.
Creating a Well-Done, Totally New Plan Is a Lot of Work, but It’s One of the Best Ways to Shoot for the Stars!
It takes a lot of time to create an entirely new, well-thought-out business plan. Beyond the time going into it, it takes a lot of positive emotional energy and some hard-thinking creativity. But the results can be incredible.
Previously, I have suggested that one route to focusing on renewing a business is to rip apart the business strategy and totally redo that, and I do want to emphasize here that I am not discounting that approach. However, redoing your entire plan is a great approach too, just don’t use it as an excuse to avoid thinking deeply about strategy—if your strategy could use some serious rework.
Starting from Scratch Can Be Liberating
Maybe you have decided that you think your strategy is okay, or maybe you think you’d rather redo the rest of your business plan as much as possible first. Although this might sound kind of like putting the cart before the horse, it might make sense if you are finding it hard to come up with a totally new strategic direction. Working on some of the “easier” parts of the business plan might get your juices flowing and help open your creativity to revisit the strategy issue later.
Redoing the entire business plan is parallel to creating a business plan for an entirely new business. If you can put aside for a moment the current ways you are doing things, then writing the plan from scratch can be liberating. After all, you can first “test” your new plan on paper and see how it fits together in concept before you try it in the real world.
If you are serious about taking your business to a whole other level, and you want to use a totally new business plan as your major tool to get there, then I suggest you commit to a lot of time to do it carefully. I’m not just talking about a couple of hours working on the plan—I’m talking about a whole lot of hours. Importantly, I think you should stretch the work over at least a few weeks, if not months. Although it is possible to write a thorough business plan in one sitting, you are far better off if you can stop, think, digest, and reflect back on each and every part of the plan.
For each part of the plan, you want to think about how your proposed approach compares to what you are doing now or what your competitors are doing. How does it fit your overall business strategy? What are alternative approaches? If I had employees to work on the plan with, I might have everyone list these alternatives on a whiteboard and then discuss the pluses and minuses of each.
After doing this for every part of the plan, I would then go back again through the entire plan. Does it make sense overall?
Next, I might consider the changes that the business plan has directed for each functional area. Do they make sense as a group? Will these changes sync well together? Then I might consider whether the risk/reward trade-off will be much higher for some proposed changes than for others. Are some changes much more critical to make now?
I might decide that the risk/reward on some proposed changes is poor and decide not to do them or to indefinitely postpone them; some other changes I might try to make immediately; others I might plan to do later, or in the case of particularly complex changes to perhaps phase them in over time.
How many major changes should be in a business plan?
Although I don’t think there is any concrete answer, I remember going to a presentation by executives from Bain Capital, one of the leading private equity firms. Bain’s business model is to buy underperforming large companies, improve their performance, and sell them for a ton of money. In the presentation I attended, the Bain executives said that they try to focus on making just three major changes when revitalizing a company. I think this number makes sense.
Keep in mind that when Bain is talking about changes they may be talking about a complex and difficult change that takes many steps. For example, they might focus on “improving the customer experience” or “improving product quality” or “improving employee retention.” Although these types of changes are complex and can be challenging, it is just these kinds of changes that can really drive your business ahead.
As an existing business, you have a giant advantage over a new business in creating a business plan! You have existing customers, products or services, employees, and suppliers. You can go out and query, survey, or focus group each of these important constituencies for input before you start on your new business plan.
Don’t feel like you have the energy to conduct surveys or focus groups? Then at least ask them. Don’t just ask, “What do you think about our products or services?” Ask, “How do you see our products or services versus our competitors’ or other alternatives?”
How Often Should You Totally Redo Your Business Plan?
I think it’s essential to at least totally reconsider every part of your business plan every single year. I think this is the most important part of running a business. In fact, I feel that once the business plan is done, my highest level work for the entire year is done.
I think planning is critical—I plan out my personal life. I even have multiple objectives for my model railroad!
Don’t worry that you haven’t planned in the past. Most small businesses don’t have a written plan. Most that do have a written plan have a poor one. The few that have a great business plan often don’t follow it.
So imagine how far ahead of the pack you will be if you have a terrific business plan and actually follow it!
Takeaways You Can Use
- Aggressively ripping apart your business plan is a lot of work.
- A complete overhaul is one of the best ways to send your performance skyrocketing.