Business Plan Benefits

Where is your company headed? You may be familiar with the quote from Lewis Carroll, “If you don’t know where you are going, any road will get you there.” Actually this is a paraphrasing of a conversation in Alice and Wonderland between Alice and the Cheshire Cat, but it sums up the idea nicely. Take this to heart when making decisions for your company. Have a business plan. Your plan may be extremely detailed, but along with it have a shorter version that is easier to refer to on a regular basis. See The Business Plan – Hold On to the Napkin for more on this. Here are some key reasons a plan (particularly the shorter one) is so helpful.

Decisions

One of my favorite humorous quotes is from the great ex N.Y. Yankees catcher Yogi Berra. “When you come to a fork in the road, take it.” Like many funny quotes this one also has a serious aspect. In business there will be times when you are figuratively facing a fork in the road. The question becomes, “Which fork do you take?” That is one of the advantages of having a business plan. In this case the shorter plan can prove extremely valuable as it is easier to build flexibility into it. Some decisions are already made for us as in the sense of “If A happens then do this, but if B happens then do this other thing.” But in reality many of the decisions we have to make are unexpected. Again, the shorter plan makes it easier to see the correct decision.

The Big Picture

While useful, a detailed business plan can make it more difficult to see where a company is headed. “You can’t see the forest for the trees” expresses this well. The trees are the details and the forest is the big picture. When traveling a GPS is a very useful device to have. However, even though it will likely get you to your destination there is something missing. When printed maps were still the only way to determine how to get somewhere it was extremely helpful to look at the overall course of the trip for some perspective. This is the big picture and makes it easier to determine what might be some helpful shortcuts. The actual route mapped out is the details, but to start with the detail eliminates the advantages of seeing the overall scene. Remember the saying, “The devil is in the details” to remind you that the details can make it difficult to see very far ahead. We can get so hung up on developing details before we have a general direction that the details can end up being essentially useless. To realize the benefits of a company business plan first sketch out a summary plan. Then, if a detailed plan is called for the summary plan can be used as the skeleton to construct it.

Does your company have a business plan? Is it detailed, a summary one, or do you have both versions? Both have a place but sometimes the summary plan is all that is needed.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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