Business Planning

Years ago in my college business course work the conventional wisdom was to develop a 3-5 year business plan.

I have written detailed and lengthy 3-5 year business plans over the years that have included exhaustive financial, market and operational analysis. These plans have served as a tool to force market research, understanding of the financial metrics and a thoughtful analysis of operational strategies.

This type of business planning is certainly useful but today’s economic environment is so different that a business plan developed today often migrates from a useful tool to being dated in less than a year because the world we live in changes so rapidly.

Does this mean that business planning and all of the attendant homework is irrelevant? Absolutely not! What it does mean is that this planning tool needs to be a living document vs. simply a tool to secure financing, hire people and provide the initial strategy and tactics for the business. It needs to be updated quarterly, if not monthly.

Today’s business plans should serve as a compass that is reference frequently to see if the business is on course. Sadly, this rarely happens. Too often the static in an entrepreneur’s daily life is so great that the compass is never check because entrepreneurs often are so busy putting out fires they rarely check their compass.

CAMPA is going to focus on this key aspect of business planning for 2010. Prior to our regional meeting in a few weeks, John Lipp will work with all of you to assemble the key metrics of developing a business plan. During the regional meeting we will focus on things that will keep you from achieving plan and during the year work on removing these roadblocks.