Imagine you’re taking a road trip. You’ve planned out your entire route. You know every highway you’re going to take and every stop you’ll make along the way. Now, imagine you’re following the directions you’ve made when suddenly there is a huge detour. A landslide is blocking the road—rocks and debris everywhere. What do you do? Forge ahead on the same dangerous path even though it would utterly ruin your car and cause you injury? No. Of course you wouldn’t do that. That would be dumb. You would find another, safer road to get to your destination successfully.
This is exactly why we need to realize that the best plans are flexible. Too many times, we create a plan and think that it’s final. But, how can something be final when you don’t know what variables will exist down the road (pun intended!)?
And yes, you do need a plan, but it needs to be dynamic and flexible so that it can adapt to changing circumstances. Long detailed business plans designed for a third party like an investor or a plan that has no flexibility are usually not productive because they are too static to be useful in a real-life scenario. A popular alternative, based on a variety of “lean startup principles,” is to skip the plan in favor of an organic plan that tests alternatives, measures, and adapts to changes in your business and the environment. Try to remember that the best plans are flexible.
A dynamic plan has some significant advantages. It allows you to examine options like a good, better, and best forecast. Dynamic plans also allow you to gain some understanding of the interaction of variables. For example, it can show you how variables like growth, marketing, operating expenses, and investment affect sales, profit, and growth. Most importantly, it encourages the exploration of alternatives rather than relying on a fixed model.
Developing a dynamic plan still requires covering traditional basics, such as:
- A model that analyzes alternatives and measures strategies. Learn more here: https://startupconnection.net/business-templates/operating-profit-model-template/
- Adapting the plan to meet its goals for your business and users.
- A description of a MARKET (customers) and their needs for your product/service.
- A description of an INDUSTRY and the COMPETITION for the market.
- A description of the MARKETING / SALES methods used to reach and retain that market.
- A description of the OPERATION / MANUFACTURING / DELIVERY of the product or service.
- A description of the RESOURCES (people, equipment, and facilities) needed to operate this plan.
- A description of the FINANCIAL requirements of this business.
- An expression of the passion and uniqueness, which make the plan special. Read more: https://startupconnection.net/2022/09/passion-and-positivity-fuel-success/
Plans must balance the need to dream with the need to be realistic. The solution is frequently to develop backups, prepare for contingency, and accept failure. In particular, failure is often a requirement for success. Yet, we sometimes fail to recognize its value in the process of achieving success. For example, fear and uncertainty accelerate the concerns about failure. Many studies have shown that we are about twice as likely to avoid losses as pursue gains. We must listen to that little voice that whispers, “How will you know it won’t work if you don’t try?”
And, if it doesn’t work, you have more information to utilize for the next attempt.
Finally, setting clear goals is essential to an effective plan. As Mark Twain said, “If you don’t know where you are going any road will get you there.” The distinction between dynamic and focused are not contradictory. You need a concise summary of what the company is about and how it will achieve its mission. If you’re a human being living on Earth, you probably know that it’s very rare for things to go exactly as planned. Therefore, your business plan needs to focus on how your company will succeed in various circumstances. It should also define the target market, financial parameters, and define operational requirements. Understanding that the best plans are flexible will help you, and your business, succeed.
Remember, your plan is a tool—like a map—that is regularly considered, and modified when you come up against those landslides. Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. Please visit our website: www.StartupConnection.net for more information.