The Rule of the Startups say: Everything costs twice as much and takes twice as long as expected. Therefore, planning is essential to minimize any unexpected turns as you start your business.
Your business plan in itself will not tell you what to do. In fact, your business plan will become obsolete as your assumptions, conditions and environment change. According to Harry Beckwith, author of the book “What Clients Love: A Field Guide to Growing Your Business” the value of planning is not in the plan but in the process of planning. Planning teaches you in a way that nothing else can about your business, your customers, and your market. There is a downside to planning, though. Planning can fail you – not because of the data, but the way you think. To harness the real power of planning in your business, here are 14 ways to help you draw the blueprints and plan for the future of your small business:
1. Forget the future.
No matter how hard you try, there are only two certain things in the future: death and taxes. Do not rest your business decisions on future suppositions. You just don’t know what will happen down the road. Instead, follow a simple rule: people will pay for what they love. Build and sell what people love, and the future will take care of itself.
2. Stop – Yes, Stop – Listening.
One of the most prevalent advice given to business owners is to listen to their customers. Beckwith, on the other hand, says stop! “Listening to customers” is based on the flawed assumptions, foremost of which is that customers say what they think. Reality shows otherwise: many people say what they think would make them look good to whoever is asking. Secondly, “people do not always understand themselves well enough to reveal themselves accurately.” Take what customers tell you with a grain of salt. Instead, watch and observe more carefully.
3. Celebrate Foolishness.
Think outside the box, and your foolish idea could be the next cash cow. Examples of success by going outside the norm are plentiful – Apple’s grape colored iMacs, Starbuck’s $3.75 coffees, and reality shows Joe Millionaire and Survivor. People love fresh and hip new ideas, no matter how crazy they may sound. Think dumb.
4. Resist Authority.
The most powerful is not always right: they just have the loudest voices. They may not always be wrong, but they are also never always right. Their opinions may reflect past experiences, which no longer hold true in given circumstances. Question authority (but quietly).
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5. View Experts Skeptically.
Experts – from economists misjudging recessions to meteorologists failing to predict rain – are fallible. They can and they do make mistakes, even armed with data to the teeth. Learn how to question what the experts say
6. Beware of “Science.”
Learn how to put “research” into proper perspective. Research does not mean gospel truth; it simply suggests a conclusion to a hypothesis. When using research in making business decisions, bear in mind that it may not really reveal what clients love. Remember from these mistakes from basing their decisions on research: Columbia Pictures to pass on E.T. and produced Star!; Ford was convinced that Edsels would sell like Hershey’s Bar. Sony founder did not listen to research, and emerged a victor with its Walkman product.
7. Mistrust Experience.
Question what you remember or read, or even those you think you know and experienced. What you think you know “for a fact” may have been a creation of your fertile imagination.
8. Mistrust Confidence.
“We are wrong more often than we know – especially when we are sure we are right,” according to Beckwith. Demonstrated in several studies, this “Overconfidence Bias” shows that whenever you are certain of something, you are wrong 15 percent of the time. Translated into business, this rule highlights the importance of questioning yourself constantly, even when you are sure you are right. Same with other people who may be giving you advice – they may be giving you wrong advises, no matter how well meaning. You also need to make sure that you find those areas where you are constantly working on mistaken assumptions – and correct those mistakes fast.
9. Avoid Perfection.
Striving to be the “best” in business is not always the smartest way to go. First, how do you define “best”? Will your customers share your definition, or do they have another idea of what is the best? Even if you define what is “best”, will you have the time, resources and manpower to implement? And will your customers care? For Beckwith, sometimes “good beats perfection.”
10. Beware of Common Sense.
Beckwith finds that common sense is “neither common nor always sensical.” While it can prevent you from making huge missteps in business, common sense has never inspired the colossal innovations of our time. To create the needed breakthrough, you need to have loads of imagination.
11. Embrace Impatience.
Like your body, your business needs to move, to exercise. You need inertia. Fail to move your business and it could atrophy and die young. Avoid falling into the lull of safety of the status quo – the “things-are-going-well-so-why-should-I-change-anything” behavior. If you become waiting-oriented, even your most dynamic employees can become dormant and lose their zest for new challenges.
12. Find the Water.
In your search for water, you often find yourself faced with a mirage. With your water supply all dried up, you find that you have exhausted all your means. So what do you do now? In business, you have researched, planned and decided on one strategy. Then you put all your resources towards that one strategy. But what if that strategy fails? You may be risking the very survival of your business. Instead, the author recommends that you test various options first to see which is the most workable and could bring the best results. Then, and only then, will you put your energy and resources. Dip your toes in several ponds, and then dive into the lake.
13. Finding the Water: A Warning.
As you search for water, do you wait until you are certain before doing anything? Beckwith says that the company that waits for guarantees is doomed. Nothing in business is guaranteed. Your past success is not a guarantee of future success. Instead, do something. Only by doing something can you start the process of learning.
14. Search for 100-X.
In financial parlance, venture capitalists are looking for investments that could appreciate 100 times, or 100-X. In your business, you will be choosing among several strategies, some of which could turn out to be winners, while others losers. Find those strategies that could produce hundred-fold returns. Focus your efforts, time and resources into one or two possible 100-X strategies.
Recommended Books on How to Plan for the Future of Your Business:
- Future-Proofing Your Business: Real Life Strategies to Prepare Your Business for Tomorrow, Today
- The Start-up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career
- Catching Digital: How to see your future in the digital blur, create smarter strategies for your business, and plan your Digital RoadMap for success
- Just Start: Take Action, Embrace Uncertainty, Create the Future
- Customer Analysis in Your Business Plan
- Common Elements of Business Plans
- Gathering Information For Your Business Plan
- What is an Investor Ready Business Plan?
- Why You, Why Now – A Critical Component of a Winning Business Plan