The Flexible Business Plan

Things change faster now than ever, and that includes business. Is it time to rethink that complicated business plan?

Some Background

In another post called The Business Plan – Hold On to the Napkin we looked at some of the reasons a simple business plan that can essentially fit on a napkin may prove more useful in the long run than a detailed and complex plan. Again, this is not to say that the detailed plan does not have a place, but it is to say that often it is overkill.

Why a Flexible Plan?

Since things change so often, if the only thing your company has is a long, detailed plan you may find it difficult to adapt easily to changes in markets, finances or even the general direction of your company. I had a client not so long ago that had developed a new product. When they first introduced it they initially wanted a fairly detailed business plan. However, in short order they realized that the initial market they were targeting was perhaps not the best one. In fact, by changing their market focus to embrace some customers that were in an underserved niche, they found that there were more identifiable ways to reach them. Thankfully they were not so entrenched in targeting their initial market that they were not able to change quickly. Actually I had encouraged them to keep the plan as simple as possible. This simplicity allowed them to have a flexible business plan that would allow quick adaptation.

Another reason for a flexible business plan is when as company is in startup mode or even when they are attempting to introduce a new product or service. Let’s face it, we’re not all that accurate at looking into the future to identify all the little twist and turns that will impact a business. That reason alone is enough to adapt a high level of flexibility.

Does That Mean Loss of Control?

While it may seem counter-intuitive, rather than have less control, a flexible business plan gives you more control because you can makes changes much more quickly. A fixed plan may get your company locked into a certain way of thinking. This can obscure the obvious, keep you from seeing opportunities, and commit you to things that in the long run are not beneficial. Here is a little analogy. If you are fishing on a lake and have heard that a particular spot is very productive, you may well want to start there. Yet, if you are sitting in your boat catching nothing while watching a boat on the other side of the lake real in one fish after the other, does it make sense to stay put? Don’t you think you should be flexible enough to make a move to another location where the prospects seem better?

A business is no different. While your product may be wonderful, if you are unwilling to try other methods of marketing or look at other potential markets even when your sales are simply not there, you may be acting foolishly stubborn.

Is your company locked in to something that is difficult to alter, or have you built a flexible business plan that allows you to quickly adapt to changes in the marketplace?

In my next post I will explore this further and offer a suggestion for dealing with change.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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