Chapter 10
TO PLAN OR NOT TO PLAN
WHO HAS TIME for planning when you’re so busy working? A good plan can be a pathway that offers guidance on how you might align the everyday work of your organization with your vision. It helps you identify how organizational behavior is influenced by the vision and guiding values. You could say that a plan is your vision’s more tactical road to reality. The problem? Most conventional plans seem a world apart from vision, values, passions, or principles, except perhaps for two: growing bigger and getting wealthier.
Most traditional plans are so rational, so detached in their quantitative focus, that they don’t connect with the organization’s people or behaviors at all. Despite the disconnect in most conventional strategic plan formats, there is great value in adopting some manner of formalized visioning and planning process. If a big-vision small-business owner wants to manifest her vision authentically and effectively, she must find a way to create or adapt a planning process that better suits the more organic, visionary nature of her way of being in business.
In our work at Ivy Sea, both within our organization and with our clients, we create tailored visioning and planning processes that are appropriate to the circumstances, time frame, and individuals involved. Our processes almost always end with a direct connection to the plan, complete with action steps and timetables that participants have articulated and assigned. Such is the way of the big-vision small-business owner. How is this different from the norm, and what approaches are optimal for vision-driven small enterprises?
Many an expert, book, and journal highlight the importance of having a business plan, and there’s no shortage of information regarding how to do one, so most people would assume that business planning is a no-brainer and that all business leaders do strategic plans. Departments of large corporations are required by senior executives to produce strategic plans and budgets for at least two reasons: to allow those in the company’s highest echelons to approve the plans, and to provide some accountability regarding how investors’ money will be spent and what types of returns investors might expect. This requirement is reasonable, particularly in a large enterprise where many divisions and departments are responsible for producing the product and making good on promises to investors.
That’s not the case in most small businesses, where the decision maker, risk taker, and investor are one and the same. Compared to a larger enterprise, the small business is a microcosm and thus requires much less formal or stringent processes, including planning. Many small-business owners—like most individuals—don’t have a formal, written plan at all, for reasons previously mentioned. In having so many roles and having direct access to everyone in the enterprise, including customers, it’s just easier to operate organically, with the vision and strategy stored in the business owner’s brain. Since the cause-effect time frames are much shorter in small enterprises, maintaining some degree of flexibility or adaptability is indeed very wise.
Also, because the vast majority of small-enterprise owners don’t have access to conventional business loans, or don’t choose to expend the energy needed to cut through the red tape for an SBA loan, a traditional business plan isn’t needed. Even in cases in which business owners create a plan as a requirement for getting bank financing, the plans often collect dust or are relegated to the deep recesses of a file drawer, never to be seen—much less reviewed—again. It’s not until a crisis, the need for formal financing or chaos brought about by a growth spurt, that these owners opt for some sort of more formalized planning process.
While the myriad reasons that small-business owners might avoid planning are understandable, there are many benefits to committing a vision and plan to paper, including those related to prominent issues that arise at some point for most business owners: finding the right life-work balance, deciding whether and how to grow, staying clear and motivated in the business, breaking free of crisis-to-crisis management, deciding when or whether to take or turn away business, and finding and maintaining good relationships with employees, clients, and suppliers. A big-vision small-business owner knows that, as with reflecting on and clarifying the guiding vision, finding an appropriate planning approach and making time for it are a key priority. Big visions rarely manifest themselves into reality by accident or complacency, and big-vision small enterprises are anything but complacent or mediocre.
According to Deborah Danielson, president of Danielson Financial Group in Las Vegas, Nevada, a solid business plan can help big-vision small-business owners avoid—or at least more easily navigate—some of the more painful business realities. “Business owners really do need a business plan,” says Danielson, who does plans for her own business as well as advising others. “I’ve talked with clients who might say, ‘I have this great idea,’ but without a plan they’re just buying themselves a job.
“The reality is that getting the business going will take at least double the money and double the time a business owner might think,” she says. “It takes a long time to establish word-of-mouth recognition, and people need to have the money to see that through. Or they’ll tell me, ‘I didn’t think it would be this hard.’ It will be; it might get much easier and you might make more money in the long run, but for most people, you’ve got to do the work up front.” Danielson is a business-planning evangelist because, for her, a business plan helps an owner anticipate and prepare for the inevitable challenges.
San Antonio-based Jim Matson of Matson Multimedia agrees. “People make the mistake of not asking the hard questions when they start their business,” says Matson, who saw this when many people fell prey to the mass downsizings that occurred in the 1980s. “Because they had money from severance packages and didn’t need to get bank financing, no one asked the tough questions that a bank would have asked.” As a result, says Matson, many of these new business owners never prepared a business plan and didn’t scrutinize their concept or the market, including the multimedia field Matson is in, and ended up with failed businesses as a result. “Some people bought expensive equipment but never researched the market and who else, including me, was providing the same service,” he says. “They ended up owning the equipment but no business.”
So Why Don’t Business Owners Plan?
Let’s face it: business owners can be a prickly, individualistic lot. Many people opt for ownership of a small business rather than employment because they like not having to carry out someone else’s dictates, particularly when the direction seems off and too much time seems spent in meetings and on organizational navel gazing. They don’t particularly like people telling them what to do, and they start their own shop because they think they can do it better. So it’s no wonder that most ignore the outside dictum for elaborate business planning. They just want to get to work improving the world and the way things are done. Who has time for bureaucratic bungling when they’re on a mission or just enjoying the everyday lifestyle and challenges of being a small-business owner?
Many of the big-vision small-business owners with whom I spoke cited just these causes for balking on the formal strategic planning process: the belief that detailed planning blocks opportunity, creativity, and an intuitive approach to managing the business; the inability to find the time, due to the vast demands of business ownership; and the perception that the planning process seems too cumbersome and overwhelming. To find our way to approaches that work for big-vision small businesses, we have to delve a bit deeper into the beliefs around conventional planning processes.
BELIEF NO. 1: PLANNING BLOCKS OPPORTUNITY, CREATIVITY, AND INTUITION
Many business owners like the freedom and challenge of running their business organically and view a formal planning process as a waste of time that could be better spent getting and serving customers or developing new ideas for products and services. Plus, for qualitative entrepreneurs—whose small businesses are a vehicle for learning, excellence, experimentation, service, and quality of life—flexibility is both appealing and necessary for the experience they want to create. For these individuals, too much planning is worse than no planning at all.
“Business planning can be done prematurely,” says Al Lovata, chief executive officer of Boston-based Be Our Guest, Inc. Lovata joined the company as its fourth employee and now presides over the 70-plus employee organization. “As long as you know there’s a need for your product or service and you know you’ve got it priced correctly, a lot of the other information can get in the way.” Lovata has seen the need for formalized planning increase as the organization expanded. “When you’re smaller, if you want to change direction, it’s easier,” he says. “You do something, see what happens. If you’re right, great; if not, you learn from it and take the learning forward. When you’re a bigger organization, you’ve got to do more formal planning. How you respond to challenges and change the company accordingly becomes more complex, because you’ve got a larger group of people with different levels of understanding and responsibility.”
Brian Rogers of Information Insights in Fairbanks, Alaska, agrees that planning can be organic or more formal, depending on the company’s needs at any given time. “We’ve been opportunistic, having an idea of what our competencies are and letting opportunities take us in a new direction,” says Rogers. “In a consulting firm, where the assets are intellectual, there’s a certain amount of intellectual chaos required, and we take advantage of opportunities that come along and aren’t going to let a plan get in the way of that creativity.”
Rogers says his group preferred keeping a capability summary—a synopsis of the talents, skills, assets, resources, and time available within the group to serve client needs—rather than a more conventional business plan that includes an executive summary, an introduction, a historical overview, a market summary, a competitive analysis, and the various other intellectual and seemingly far removed aspects of such a plan format. “Our approach has been to have a good handle at all times on the capacity of the company to do work versus the amount of work there is to be done, and managing that so you’re not pushing everyone to 100 percent of their capacity,” he says. “There’s always enough work to keep people busy, but if a new opportunity came in, we would be able to balance things to accommodate it.” While Rogers’s approach worked from the organization’s inception to the recent past, he and his partner prepared a more formalized plan to attract venture capital for several projects now in the pipeline.
Barb Banonis of LifeQuest International in Charleston, West Virginia, prefers not to do traditional business planning because of the constantly changing nature of the market. “My best planning strategy is to know myself and what I have to offer,” she says of her personal-development consulting business. “I’m more able to move flexibly into new roles and markets. It can be difficult because people sometimes don’t know how to classify you, but it’s an asset because they don’t classify you.”
For Cec Stanford of Prairie Herb Company, planning is a matter of following her intuition and always having a goal. Stanford’s company, with five or so part-time employees working from her ranch in Gillette, Wyoming, makes bottled oils and vinegars that are designed to be as beautiful as they are deliciously functional. Prairie Herb products were included in the 1995 America’s Best Foods book and have received other honors and attention, finding their way to some very famous tables.
“If I have a feeling about a product that we’re offering, or if I have a feeling that a change needs to be made, I try to follow my intuition,” she says. Stanford says that, for her, it’s a different form of business planning—always knowing what your goals are and incorporating your intuition and day-to-day feedback from customers—that works, whether it’s accepted by the more traditional business community or not. Even while rejecting formal plans, Stanford has tapped into an advantage that a big-vision small-business owner has: the ability to quickly adapt and act on intuition when an opportunity or issue arises, instead of wasting precious time having to route the idea up through layers of hierarchy or through the morass of organizational politics. “I’ve taken classes on business planning and had a difficult time finishing the plan because I was running a business at the same time,” she says. “Most of the people who finished the perfect business plan never started a business! I just don’t have the time.” And that leads to a second predominant belief about planning.
BELIEF NO. 2: BUSINESS OWNERS ARE TOO BUSY TO PLAN
Like Stanford, many small-business owners don’t engage in business planning because they find themselves busier than they ever thought possible, with the demands of running the business taking precedence over what they perceive as a long, drawn-out, and not ultimately beneficial planning process. In most small businesses, minimal staffing means that each individual manages several areas of responsibility, and few businesses have the resources to employ a highly paid strategist to spend weeks or months producing a plan. Instead, they go right to the heart of it, using only the information that tells them what they need to know at the time.
“Our planning processes were very informal,” says Jackie Fellers, who stepped in to run Fellers Specialty Advertising in San Antonio, Texas, when her husband passed away. “We were just so busy, putting a hundred percent into the business, and growth just came. I never had a need for a business plan.” Yet Fellers always made time to review her profit and loss statements on a regular basis, so she knew exactly where the business was from a financial standpoint. “As long as our numbers looked good, that’s what I focused on,” she says. “You don’t want to ignore where you stand financially, because you could wake up one day and be in big trouble.”
Kevin Owens, founder of Select Design, Ltd., in Burlington, Vermont, didn’t do formal planning but did keep a keen eye on his vision of creating a great place to work and trying to be the best at what Select Design does, an approach he continued to use even when the business grew to more than 50 employees. “Our planning was haphazard,” says Owens, “and it seemed as if many decisions got made for us, where things would just happen and opportunities came to us. Our primary focus has been on caring deeply about our clients and their needs.” Although Owens’s group was more effective at responding to challenges and opportunities as they came up, rather than doing proactive planning, they also expected that to change when the company expanded. “The organization is bigger, the iceberg is bigger, and there’s more to lose, quite frankly,” he says. “The worst-case scenario is not just about two people failing in a business and feeling crushed. There are a lot more people affected by the failure and success of the business now.”
Owens’s company grew—in longevity as well as size—thanks to a clear vision and good work, yet the growth has created challenges in addition to the added sense of responsibility for ensuring the company’s viability. Despite a larger payroll, he and his partner found themselves busier than ever and still responsible for the lion’s share of revenue generation, as well as the firm’s operations and financial management. At the time we spoke, Owens was looking at how to create more balance between his business and family life and to delegate additional responsibility to others in the business.
These are the very challenges that, regardless of the business’s size or one’s decision to opt for qualitative evolution or quantitative growth, can be eased somewhat by doing more formal visioning and planning earlier in the life of your business, or by starting wherever you are at the moment. It’s no wonder that it doesn’t seem feasible, given the perception that business planning has to be an all-or-nothing affair resulting in a four-inch-thick document that took months to prepare and includes details that seem irrelevant to the realities of running a very small business—particularly one driven by vision, mission, values, and other qualitative priorities. But as several of these business owners have indicated, there are options that can be linked together like puzzle pieces to create a workable strategy that helps maintain financial viability while doing the enterprise’s more passionate work. A big-vision small-business owner is always looking for ways to marry the two.
While he doesn’t commit his vision to paper, Rich Maggiani, another Burlington small-business owner, uses a cash flow-tracking spreadsheet and creative questioning as his planning tool. With bachelor’s and master’s degrees in business and accounting, Maggiani fully understands the financial aspect of running his marketing and graphic design shop, Page Designs, but doesn’t go all out for a traditional planning process. “Looking at numbers on a spreadsheet isn’t going to tell you how to be more profitable,” says Maggiani. “So tweaking the numbers isn’t coming at it from the most productive direction.” A spreadsheet also won’t tell you what types of employees you need or how to manage them well—an area for which Maggiani’s 14-person firm has received statewide recognition. Instead, Maggiani says he asks questions.
Rather than saying “Our costs are too high so let’s cut them,” Maggiani asks questions such as “Why aren’t our sales higher? Why isn’t this client relying on us more? Are our expenses too high?” “I’ve learned to look at the bigger goal,” he says, “asking ‘This is what we’re trying to get at here; is our approach working? Is it linked to one of our highest goals?’” Maggiani’s approach relies on the fact that he always knows what his highest goals are, which include creating livable jobs that add to an individual’s life, ensuring an environment of respect and trust, and reinvesting profits in the company.
For Pat Heffernan, copresident of Marketing Partners, Inc., another Burlington firm, taking the time for visioning at startup has provided a solid foundation as the business has evolved and grown. Heffernan, whose company has about 12 people, including the two partners, worked with her business partner on a very detailed vision of what they wanted the business to become. “We did everything from envision what it would be like for our clients walking into our ideal office, to how our employees would be ideally treated, to what we envisioned 10 years into the business,” says Heffernan.
But Heffernan and her partner didn’t opt for creating a traditional business plan either, despite her own preference for formal planning and a master’s degree in business administration. “We had our mission, our values, some key words, and thoughts about where we wanted to be,” she says, “and we made an investment in talking about some scenarios, how we would handle specific things.” The two partners do a planning retreat once a year, where they look at how they’re doing, whether the business is on track with established goals, and where they want to be.
The planning process can also shed light on what’s possible for a big-vision small business and its owners, something Keith Rollins of Portland, Maine, emphasizes. “Whether you’re looking for financing or you’re just trying to focus your thoughts, a business plan is important,” says Rollins, who helped establish The Resource Hub. “A business plan doesn’t have to be stagnant; it can be always evolving, changing on a weekly or even a daily basis. But it helps you focus on what you want to achieve, and it helps you gauge how well you’re doing.”
“If you’re not meeting projections,” says Rollins, “you can consider what changes you need to make in the business. Many business owners underestimate their opportunities, or the business underperforms because they don’t want to do a plan.”
As Owens, Maggiani, Heffernan, and Rollins demonstrate, visioning and planning, like the business itself, can be flexible, creative, energizing, and clarifying. There are options that lie between doing the conventional plan and winging it. The trick is to adopt visioning and planning processes that, while tailored to your personality and time-management reality, are designed to collect key information from your mind and capture it on paper so it can be reviewed more objectively for gaps and shared effectively with the people on your team so the plan translates into action.