No Business Plan? (slap) They Told Me not To? (slap) Ok, I'll Write One (hug)
If I hear one more business "guru" or so-called expert say that you don't need a plan I am going to puke...and then slap someone. Yes, there are real short-term benefits of being able to change course on a dime, but nobody seems to be pointing out that while it is OK to change tactics to achieve a certain goal, the goal remains steadfast.
Let me explain?
Think of it this way - A business plan is your destination. Say you are planning to drive from home in Florida to hang out with your relatives for Christmas in Massachusetts. (I wonder how I came up with that example?) My business plan is to get to MA. Now my marketing plan is my tactics. Those are the roads, highways, and rest stops along the way.
So suppose there is an accident or construction along the way. Then you change course- your tactics. Suppose a friend tells you about a shortcut. You change tactics. What does not change is your final goal. To get to your family in MA. The simple truth is that if you don't know where you are going, clearly, succinctly, and in writing - the obstacles, distractions, and peripheral mini-wins are going to trip you up.
Here is where most people slip up
Suppose you are driving along and your wife sees a giant sign that says 99% off Jimmy Choo shoes, or I see a sign that says "Today only, 80-inch plasma TV's for $1" Do we stop? No. Seriously? Yes. Now if along the way we found a back road that will get us to Massachusetts 1 hour sooner, do we take it? THAT is where it is a maybe or a yes. Do you get the distinction? Stopping for a deal, even a ridiculously good one, has nothing to do with our final goal (to get to MA) but changing course for a potential of reaching the goal sooner or better (even if marginal) is something we will evaluate. You say, "So let me get this straight. I pass up a 80" plasma for $1, but I take a back road that will make my trip 1/20 shorter?" - Yup.
So how to you combat this?
THIS is the reason you need a business plan. If you did not have a clear, written goal you can refer to ALL THE TIME, there is no way you or I would have the perspective or willpower to achieve it.
Perhaps the best way to get this to sink in is an example back from my days as a principal in an investment real estate firm. A few years back, I started working with one of the best sales professionals I had ever met. Business was great, he was working 70 hours a week, and pulling in great paychecks. After consulting with him a few weeks and creating a killer marketing plan, we realized we had a bottleneck. Him. He was already working crazy hours and there were just not enough hours in a day to take on new business no matter how good. From that point, we parked the marketing plan and focused on the business strategy.
We agreed on a plan to take on no clients unless the property was over $500, 000 and we had a very good chance of getting both sides of the commission. For a top producer this is a HUGE change. They are ingrained to take any business, anyway they can. Because he was so fantastic at converting calls to qualified leads, we set up a referral program to front our tier 2 prospects to other agents in exchange for 25% of the final commission. That allowed us to keep in place turnkey marketing programs targeted to smaller profit centers, and still earn a healthy side income on very little work.
With this strategy in place, we were allowed once again to focus on our marketing plan to help roll in larger, more profitable clients. We still continued to get calls every day for smaller clients, and many times, we had the perfect buyer ready to roll within the hour on the sale, but we had agreed to only focus on larger clients, REGARDLESS of how quick or easy we knew the sale would be. For weeks he would look over at me with puppy dog eyes begging to take on this easy client, and I would point to our business strategy on the wall. Eventually he got the idea and stopped whimpering.
Moral of the Story: Without the business plan in place, we would have NEVER been able to switch gears and focus on where our real profit centers lay.
Did it work?
- Pre-plan $200k commissions
- Year 1: $400k commissions
- Year 2: $1.2Million commissions
Not a bad split for 2 guys.
So, in closing?
I hope you can now understand my belief that a solid, written business plan is where it's at. That does not mean that it is set in stone, nor does it mean that you should have the ole' football spirit of "Never Quit. Never Surrender." There are times when you should quit, and there are times when you should surrender. You just need to have the discipline to treat these as serious strategic decisions, not off-the-cuff alternatives. If, on my trip to MA, my wife went into labor, or close relative died, that would be a game changer. My goal itself now changes. In business that is the equivalent of the advent of the Pony Express, the Steam Engine, the Automobile, the Television, or the Internet. Once those shifts happen, everything changes, and your business plan will need to as well.
Well hope this was helpful to someone. In case you haven't figured it out yet, my next post will be ?..hold it?.hold it? Yes! The One Page Business Plan. Stay tuned!
JJ Kennedy is CEO of Evil Genius TV, the small business coaching and strategy arm of Evil Genius Interactive, a web and marketing development firm located in Gainesville, FL. He is an MBA, happily married to a Veteranarian, and is hoping to have a few little ones soon.
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