Plan and adjust continuously, we don’t have a blueprint.
When planning a building, how long might you expect it to last? 25 years? 50 years? Buildings of substance are planned to last for 50 years or more. Why? It is very often legally mandated. Why? If the building is faulty, someone could be killed. The stakes are high. To not have a plan for the foundation, the mechanicals, the walls, the roof that meets code, the building would be illegal. As a result, few buildings of substance fail.
What is your guess? How many businesses fail in the US? Keith Speights, of the Motley Fool, sites Bureau of Labor Statistics to state that:
Roughly 20% of new businesses survive past their first year of operation. …around half of all businesses no longer exist after five years. Only one-third make it past their 10th anniversary. *
*Keith Speights, What Percentage of Businesses Fail in Their First Year?, The Motley Fool, May 3, 2017
Unlike a building, that must pass legal muster, only about 35% of all business plan. *
*Rieva Lesonsky, A business Plan Doubles Your Chances for Success, Says a New Survey, Small Business Trends, January 20, 2016
In other words, 65% of business owners don’t provide themselves with a business plan, or a foundation to succeed. The 35% that did have a plan had higher success securing a loan or investment capital and growing their business.
We can learn from the example of planning a building. Plan, Plan, Plan before you build your business and open the door.
There are, however, substantial differences between planning for a building and planning for a business. If a building is well planned, it can last upwards of 50 years, with modifications of course. The ground on which it is built doesn’t move. The environment around it can be expected to be stable for a period of time.
With a business, the environment is constantly changing, and the foundation or the assumptions upon which the business is based can change drastically overnight. As a result, business owners need to update their plan… continuously.
If you are a business owner (no matter how many years in business), begin to plan backwards …from your personal goal or what you want out of life. (Tweet this)
- Organize your thoughts about what is important to you, what your commitments are as a person, and what you want to achieve in life.
- Imagine the kind of business you will need to have 3 years from now to support your dream and vision.
- Work backwards from the kind of profits you will need to generate, to the products or services you will need to sell, to the kind of customers you will need to attract and satisfy.
- Have conversations with your stakeholders about the milestones you will need to accomplish to make this plan happen.
- Develop a schedule of work to tackle the first milestone, then the second, and so on.