Blog

Why Do Business Owners Fail at Business Planning?

June 29, 2010 by Frank Goley, Business Consultant

As a business consultant, I see many types of clients who get into the business planning process all motivated and ready to go, only to be deflated and unmotivated after the first couple of business plan sections. What is the difference of those who see it through and work hard everyday to complete the business planning process?

I think it is a host of things but here are some of the reasons why people fail at business planning from my perspective…

Not a Priority

Developing a business plan takes consistency. I recommend to clients to work on it two hours per day before their day starts. This way the business plan work gets done first, everyday. I find if clients try to work several hours at a time on a plan, they often get strung out and over loaded.

Hard Work

Getting all the details of a business down on paper is a lot of work, and it is work many business owners do not enjoy. Yet it is the most important tool a business owner can use to achieve success. Understand it can take 100-200 hours to effectively develop a business plan. For larger plans, it can be upwards of 300 hours. If you are working with a business consultant on the plan, split the work 50-50. Even then, it is a daunting task.

Don’t See the End Game

Admittedly many business owners don’t see the benefit of the business planning process until they are well in it, and some really don’t see the advantage until it is fully implemented and getting results. It is just a piece of paper, right? What difference can it make in my business? Great questions. Look at a business plan as a tool. If developed well and then used effectively, a business will enjoy the success of it. As importantly, a business plan sets up a tracking process for a company to really see how it is doing and having a platform to track and gauge strategy. Prior to the business plan, the business owner was just guessing and spending money and effort with out real direction and purpose.

Think Financial Forecasting is Impossible

I should probably put this at the top of this list! Developing financials is the last step in the business planning process. If the business plan process is properly designed and executed, then the financial assumptions and forecasts have been developed with in the process. So all the business owner needs to do is some number crunching. With the software programs out there today, any one can crunch the numbers to come up with a business financial. The question is whether the financial is realistic and not just cookie cutter. I like a business planning process that is progressive, starting with the Company and Management, next moving on to Products and Services, then Market Planning, and finally Strategic and Sales Planning. At the end of the strategic planning, all the assumptions necessary to produce solid financials are developed. It is all about a building block PROCESS!

Need some help and direction for your business planning? See my Business Plan Book for a proven planning process and great business planning tips.

Here’s a Video on Why Business Plans Are Important…Hope it helps!


Share/Bookmark

Posted in Business Planning.

Leave a Reply