Personal observations of recent business planning for small businesses

One of the most difficult questions to answer, as a small business owner, is “do you have a business plan?”?

The problem is, most of us don’t really have a great answer to the question.

Too frequently it is “no, not yet, I am working on it. Or I have one, but it is out of date or not right. Or I am too busy running the business”.

Everybody has a plan.? Our plan is in our head. Some of us have it in writing in some form or fashion and most of us have tried multiple times.

So why have a written plan??

Nobody builds a business by themselves. But, without having a plan in writing, we make it very, very difficult for others to help us.?

When we have our plan in writing, it makes it very easy for people to see and understand our best thinking about what it? is we are building, why we are building it and how we are going to build? it. They can see our blueprint and it helps them get up to date, within just four or? five minutes. The other advantage is that you can print this out easily and carry it in your pocket, to review in your free moments - especially if we make a one-page plan (the subject of a later post).

In 2020 and 2021 I have been asked to assist about 30 businesses with their strategy and planning - from conceptual startups to operating companies.?

These have included:

• Sardine cannery in Kenya?
• Soap manufacturer in the Philippines?
• Dental surgery in Australia
• Pizza restaurant in Hong Kong?
• Fitness instructor in Singapore?
• Ukrainian engineering startup?
• Indonesian construction equipment supplier?
• Singaporean coffee shop?
• Bus company in Thailand?
• U.S. anti-aging spa?

With this experience, I now classify the status of small businesses as follows:

1. Conceptual or Pre-Trading
2. Pre-Profit
3. Cash flow positive and Growing?
4. Established and Growing?
5. Established and Stable?
6. Established but Stressed?

My general observations of some of the underlying problems of these small businesses (where the owners work in the business) are:

• They often have high ego, with little humiliyy and enhanced confirmation biases?
• Often the owner was resistant to taking advice, especially in family-owned or family-financed organizations.?
• Unwillingness to delegate?
• Little formal planning - keeping it "all in the head"
• Not having a well-defined risk identification, assessment and response program
• Not willing to pay for external strategic or planning advice.?I was at a meeting with a guy recently, who was boasting about his multi-million dollar startup (although not yet trading, or even legally established) - when I suggested that he pay a $5000 fee for my assistance in putting together a? business plan to present to potential investors, he thought that was too expensive!
• Resistance to "hard" or difficult questions.?Such as when I asked the founder if she is capable of running her new business (she was a 28 year old rich kid). Two years later - they are facing bankruptcy, and very disappointed family investors.?
• Ill-defined goals and strategy to achieve these goals and implementation plans?
• Under-resourced, both financial and personnel?

What have I learned from this??

• What I have come to learn is, when somebody says I need a business plan, that is code for "I need help".
• If they just ask for "friendly" advice (in other words, unpaid), they are usually not serious. It is intriguing that if they are paying for a service (such as my business plan consulting), they are usually always on time - but if asking for "friendly" advice, they don't seem to be as concerned if they cancel or postpone meetings.?
• I have learned to ask for 50% payment upfront, and the remainder one week before the final report submission.?
• Start simple, as if you would as if you were seeing your local doctor. Do a corporate general "health check" of the business, then define the goals - which can be multiple, for example, 3 months, one year, three years.?
• Define any external risks and internal barriers that can effect the business from achieving the defined goals.?
• Ask the owner if the product or service is still relevant in these current Covid-19 times??

If they can answer these simple questions we can then develop a relatively simple business plan (this can be usually be done in less than one hour) - using the following template:

It is basically a description of "what" the business is all about (I was inspired by the original template of Jim Horan).

If you would like some real examples from different business sectors, including non-profits, please contact me directly by Linkedin Message.

However, unfortunately more than over 80% of those that I have asked these questions of, cannot completely fill in the template.?

It is no wonder that more than 50% of startups fail within the first three years.?

Can these odds be improved? Absolutely!?

But owners and founders probably need to improve their humility, have some accountability partners (I call them “planning buddies”), be honest about their strengths and weaknesses, identify any risks and challenges, and obtain some real-world, professional practical advice.?