The Definitive Business Plan
The Definitive Business Plan
The Definitive Business Plan
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The Book – Introduction

From the book:

"Everyone knew what Walt wanted. Everyone had objectives. Both were communicated all the way down the line. The management layer was flat and responsibilities were clearly defined. We had a good self-image and the company ran well."

Does this quote from a former Walt Disney executive apply to your business? It could do. It contains two important ideas. The subliminal message is that Walt had to know what he wanted before it could be communicated. Knowing what you want is what business planning is all about. It is fundamental to business success. The other important suggestion is that when you know what you want you have a useful management tool to help you run a successful business.

Back to Walt. He had two characteristics that are important. First, he knew about planning. The movie business requires meticulous planning to turn a dry script into a lively strip of celluloid. You do not hire a million-dollar actor so that he can sit in his trailer drinking whisky while the set is prepared – you schedule him to appear when you are ready to film. You do not keep changing location to shoot the script sequentially. You take all the shots for one scene at the same time and then juggle them with the other footage to assemble the story in the correct order.

Second, Walt was visionary. You have to be, in order to take concept and turn it into a successful movie film. This does not necessarily imply that you have to be a visionary to run a business, but you do have to develop a vision for the future. An excellent way to do this is by preparing a plan. Let me give you an example.

A few years ago, a famous bank's customers included two with very similar businesses. Both men were in their 30s. After serving apprenticeships as printers' devils they were eventually made redundant by changes in technology and working practices. They did not know each other when they used their redundancy pay to start their own small businesses doing what they knew best – printing – in different areas of a busy city. This is where their fortunes began to diverge.

One of them set up in an old garage just off the main shopping area. He started with second-hand equipment. Passing trade kept him busy and he would sometimes work through the night. Within a few years he took on three young assistants and a secretary-come-bookkeeper. He earned a satisfactory living, had a comfortable house and a new family car, and sent his children to a good private school.

He was reluctant to spend time planning because, in his words, his company was small, reasonably successful, and he understood exactly what he was doing. Eventually, to support his overdraft renewal request he wrote what might be described as fairly-adequate plan. It explained his business well, but the future was little more than an extension of the present. The enforced planning exercise helped him focus his thinking and improve some areas of his work, but he remained bogged down by operational issues.

The other young man had a tough time to begin with. His print shop was well fitted, but in a small industrial park hidden behind a vehicle depot. He worked alone, failed to pick up much passing trade and times were hard. He was obviously bright and motivated. His problem was that he did not know how to progress from where he stood. However, he was very receptive to the idea of developing a plan when it was suggested to him.

He looked long and hard at his market and identified areas where he could develop his business. He did not do anything difficult. He just worked through a logical process using some of the advanced but straightforward techniques described in this book – and arrived at some solid conclusions. Understanding his business, competitors and market helped him develop a view of where he could go in the future. It enhanced his vision. And because he knew his business, it was easy for him to develop a strategy for realizing it. Turning a strategy into an operating plan is not complex.

He wrote a short report explaining what he wanted to do and how he would do it, and his bank lent him the required money. He followed his plan and used it to monitor and manage his business through periods of recession and boom. When he took on new employees he explained his plan to them, and gave them appropriate responsibilities and objectives. The business ran smoothly and grew like topsy. Eventually he was happy to sell out to a big printing company for considerable riches.

There are three or four important points. Both businessmen increased their success as a direct result of developing proper business plans. The entrepreneur who used superior planning techniques did better for it. He gained further because the plan was used effectively rather than being left to rot in a drawer. Moreover, no business or business unit is ever too small for a plan – yet the same planning methods apply equally to major corporations.

Planning is a worthwhile exercise and it is worth doing it well. Business plans contribute to all activities – commercial and non-profit making. A business plan sets out where you are. It shows you where you are going. It identifies landmarks so that you can check your progress. And it helps you in steering around the inevitable obstacles. It can help you to shape your vision and make effective use of opportunities and resources such as people and equipment.

This book is a practical and pragmatic guide based on experience in many areas of the business world. The techniques – the planning methodologies – described here are proven to be effective. They provide a fast track to writing a business plan, a mechanism for a more-considered approach, and a framework for analysis. The ideas and illustrations are aimed at helping you analyze a business and develop an intelligent business plan. This knowledge and the hints and tips show you what to watch out for in other people's plans. The book also takes care to explain how to obtain approvals for a plan, how to finance your ideas and how to use it to steer a business. In summary, the book shows you how to:

  • Assess the current status of a business, including skills, resources, products, markets and competition.
  • Define vision, mission, values, the core objective and operating objectives.
  • Develop strategic and operational plans.
  • Create financial forecasts, cash flow projections and operating budgets.
  • Pull all this together into a well-written business plan.
  • Determine what type of funding is required (if any)
  • Make use of a surplus or decide where to look for the funding.
  • Value a business and assess return on investment.
  • Obtain the necessary approvals and funding.
  • Use the business plan to run a business efficiently and successfully.

The book will benefit the newcomer and seasoned veteran alike. No special prior knowledge is required. It is written for anyone who needs to produce and use, or even approve business plans, whether a director, executive or manager, and whether in a major corporation, a smaller business, a new enterprise or a non-profit making organization. You may well be concerned with a full business plan. Or perhaps you need just a part of it; a strategic plan, a marketing plan, an operational plan for one activity such as a research and development or a construction project, or a financial plan.

Whoever you are, whatever your business interests and whatever your perspective on business plans, this book is for you. I hope that it helps you to achieve success.

Richard Stutely

See also the Introduction to the Second Edition

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