“I can't tell the future so how can I develop a plan.”

“My business is impacted by too many outside factors beyond my control to be able to create a meaningful budget.”

These are the words of a business owner I recently met.  Sound familiar?  So often we feel it’s impossible to develop a business plan because we do not control the factors that drive our business.

So what's the purpose of developing a budget or heaven forbid "a long-range plan"?  Why go through the effort if the plan will be inaccurate or circumvented as soon as it is written?  How can we say what will happen In the future when we can't control interest rates, the price of commodities or the actions of our key customers?   Sound familiar?

Planning is a difficult and sometimes too formal of a process. How many of us set goals?  Income targets, purchases, new business lines to explore, losing weight are all simple examples. New Year's resolutions are meant to be broken, so why do we expect more from our business plans?  Why do we plan and why should we spend the time and effort to document what is far from an accurate science?

As a business grows and it becomes more complex, the need to document ideas and direction becomes critical for success.  Just like personal goals the likelihood of achieving success increases when plans are written.  But it's more than that.

Complex

A business often starts out with a simple idea, driven and implemented by a few people.  The distribution of work and rewards tends to be relatively small, but the rewards for the few are inviting.  Then, as a business grows, the scaling a business suddenly requires more outsiders and crafted processes.  Now the world gets complex.  Written plans construct a framework for communication.  This includes not only the communication of the direction, but also the framework (for outsiders and the increasing pool of advisors) to communicate results.  Perhaps most importantly, written plans create a benchmark to gauge the results.  Are they on track?  Is something different from initially assumed?  What changes are necessary to achieve the overall goals?  Are things better than initially planned (move faster) or not as good (move slower, change direction)?

Process

Planning is a process.  Some plans should be complex documents with a significant investment of  time and research.  Other plans should be simple, one page plans for quick review and reporting.  Either way, the planning process needs to provide:

Vision – a big picture statement of what is to be achieved

Mission – why, for whom, what are common elements of the mission

Research – hard data and analysis to support the vision’s viability

Strategies –key methods and ideas for implementation

Objectives – dated benchmarks to provide “look back” objectivity to measure progress

The process needs to involve the principal players and advisors:  financial, marketing, systems, technical and human resource types.

Resources

So where does a growing business get the resources to plan effectively?  An interim CFO or part-time CFO can be a cost-effective way to obtain valuable experience for planning; in addition to the experience with the business aspects of venture capital and business funding, banking relationships, cash flow, modeling and systems development.  B2B CFO^® partners have on average nearly 30 years experience in virtually every industry type with a solid understanding of marketing, operations and finance.  Utilizing a B2B CFO^® partner provides experience at a cost that matches the organization’s resources.

If you would like to learn more about the next step, please contact me at 817-729-0688 or send me an email at BruceBenes@B2BCFO.com  for a no obligation consultation and analysis.