I read an interesting article yesterday entitled
Whilst many of the author’s points are related to the US startup scene, there was one that really resonated with me and one which I think is very relevant to SMEs in the UK. That is the idea of business planning. Back in the mid-90s when I did my MBA, business planning was central to the teaching. The idea that to be successful, you needed to start with a business plan, covering everything about the business including detailed sales & cash flow forecasts. 25 years experience later, I am not a fan of business plans. Some aspects are useful, especially where they force you to consider your business model, the market in which you plan to operate and the potential value you can deliver. However, beyond this, when they move into the realms of sales and financial forecasting, they require too many assumptions to make them useful. It’s easy to write a business plan that says (as Del Boy would put it) “This time next year we will be millionaires”. I know, I have written them in my time, and sadly I am still aiming for my first million. The fact is No Business plan survives the first contact with the market. As soon as it is released into the wild, assumptions will start to tumble, opportunities that you had not even though of will come out of left field and the business you have at the end of year 1 will bear no resemblance to the one in your business plan.
So What Has Changed?
In one word Technology. 25 years ago, when I did my MBA, information was scarce, and expensive to come by. Getting feedback from you market was slow and expensive as was the ability to monitor the impact of your marketing. Business planning based on assumptions was necessary. There was no other way. Roll forward to today; information is easily accessible and feedback is instant. Put out a marketing message by email or social media and 24 hrs later you will be able to measure the impact of your message. Launch a new product or service, and within weeks, you will start to have an idea of how the market receives it. In 2018 often the best market research is to give it a go and see what people think.
Do Stuff and Iterate
In today’s business world, the cost of not getting it exactly right is significantly reduced. So my suggestion, especially when it comes to marketing is, rather than planning in great detail:
Do stuff and iterate
When you have an idea, go for it. Get it out there and learn what people think about it. You will quickly discover whether your idea has legs. The real-world feedback you receive from the marketplace will allow you to refine and develop your idea. Keep on doing this, trying stuff, learning from it and refining your activities. Next year, whilst you may not have a million in the bank, you will have a much more effective business. Much better than spending the first 6 months writing, reviewing & refining your business plan before stepping out of the door.