Planning and the Entrepreneur

So, what do we mean by 'planning' in the business sense. Well we can define four separate aspects of the business planning process.

The business plan itself, a process, usually formalised, considering all aspects of your proposed business and designed to:

• Clarify your own objectives;
• Impress would-be investors or funders
• Focus the minds of the principals as an on-going process.
• The marketing plan, establishing that a market exists for your products, that it is accessible and deep enough to keep your business afloat.
• A budget and cash flow forecast showing that the business can be profitable, and predicting the depth and duration of the inevitable cash-flow hole as your business rises off the launch pad
• A project plan showing
• The sequence and duration of the activities associated with your start up
• Predicting the dates at which the various milestones in the start-up process will be achieved
• Identifying the 'critical path' activities where your activity and resources need to be focussed.

You note that we talk of the business planning process rather than the business plan as a document.

It is inevitably better to have a document to refer to, and your bankers and backers will want to see documents, but it is the process that is important to you.

Though we talk of the four plans as if they are separate things, they are in fact inter-dependant. Your marketing plan could almost be considered as a chapter in your business plan and your project plan will be key to your cash flow projections.

Think of them as four stones cast in a square pattern into a still pond. As the waves radiate out from the spots where the stones hit, the water will only be disturbed by the ripples from the nearest. At this point each plan is separate and distinct, but soon as the ripples spread, the water will be disturbed by two, then three, then eventually four sets of ripples merge.

As you start your plans you will soon find that each needs input from one, then two and eventually all of the others.

Here lies both the strength and the danger of the process.

The interaction between the plans means that each plan is improved by the existence of the others, whilst the temptation to constantly revisit each plan can lead to paralysis.

There is a truism about medical record keeping, it can often tell us why the patient died rather than how to keep the patient alive.

So how much time should an entrepreneur invest in the planning process?

Perhaps you are asking the wrong question. Why not try:

• Did my last reworking result in significant changes to my start-up project?
• Did it expose important issues I had not considered before
• Will another reworking result in a significantly different plan?

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