You need a business plan!
This is very good advice. A business plan can help you do things like test your assumptions and ensure that your calculations on projected revenue, expenses and profit are realistic. In 2006, Tim Berry contributed and article to Entrepreneur entitled “15 Reasons You Need a Business Plan” and those reasons are just as relevant today.
What is the One Thing Business Plans Often Ignore?
Michael Gerber author of the E-Myth series of books calls it the Primary Aim. Phil Cooke author of The One Big Thing describes it as your purpose for being on the planet. I call it your Over-Arching Life Goal.
While it is absolutely true that your business requires a plan to be successful I would like to pose this question:
What good comes from owning or managing a successful business and not knowing what to do with your success?
I want to help you influence your revenue to grow and that is what Tony Robbins calls “the science of making money” but more importantly I want to help you learn what Tony Robbins calls the “art of being happy” which is even more valuable.
Figuring out what you want to do with your life should always come before figuring out how you are going to fund your life. You can develop a very sophisticated business plan, execute that plan to perfection and generate millions of dollars in revenue and after all that effort you may one day realize your on the wrong path. Don’t fall into this trap, live your life intentionally and as Tim Ferris says develop Lifestyle Design.
How can this transform your business?
Let’s take a look at an entrepreneur named Stan to illustrate the point. Stan is 30 years old, married but with no kids. Stan has one goal in life and that is to influence his revenue to grow from $70,000 to $200,000 a year.
Stan decides that to achieve his goal he is going to work 16 hours a day. In one year Stan reaches his goal and his company nets $200,000. So he reached his goal, now what? Aim higher next year of course so he pushes his people harder, he pushes his customers harder and he squeezes his suppliers harder. After two years of this he has now influenced his revenue to grow to $500,000 a year.
What was the cost to him personally and how did it impact his company?
Stan has done nothing but work and sleep for two years. His marriage is in shambles, his friends have all moved on and Stan hasn’t done any of the things he loves to do. His health has suffered because he hasn’t been eating or slepping properly in two years. Stan has lots of money but he is alone with no one to share his wealth with.
At Stan’s company, all his employees are stressed out and uninspired. Putting more money in Stan’s bank account just doesn’t inspire them, go figure. His customers are starting to get the feeling that maybe Stan’s company cares more about making a sale then doing what’s best for them. Stan’s suppliers dread seeing him come through the door because they know Stan is going to squeeze them to the point that it isn’t worth doing business with Stan.
In the end everyone leaves Stan, his wife, his friends, his employees, his customers and his suppliers. Stan achieved his goal of influencing his revenue to grow and in the process destroyed his life.
Now let’s back up time and start over and let’s see if Stan can do things differently this time.
Meet Stan a 30 year old entrepreneur with a big goal. Stan wants to be a leader in the business community and wants to change the world by making a meaningful contribution to society. After careful consideration and consultation with his circle of trusted advisors, which includes his wife, Stan decides to launch a company dedicated to helping elderly stay in their homes longer.
When Stan meets with his employees he speaks with them about how serving others gives them the opportunity to let their greatness out. Stan’s employees love working for him and recently Stan helped two of his employees follow their passions to start a business that helps at risk youth become entrepreneurs themselves.
Stan’s customers really get the feeling that everyone in Stan’s company from the top down really care about them as individuals. Stan’s suppliers just voted Stan’s company “best customer” 2 years in a row. Between the personal referrals from Stan’s customers and the customers Stan’s suppliers send his way Stan had to hire 19 new employees to keep up with demand.
In the end everyone loves Stan, his wife, his friends, his employees, his customers and his suppliers. Stan achieved his goal of being a leader in the business community and to change the world by making a meaningful contribution to society, oh yeah and in the process became a millionaire.
What’s the point?
The point is this, don’t plan your business until you plan your life. Once you set your sights on a goal worth pursuing that others can respect, that speaks to you on a deep level and will make a difference in people’s lives then your formal business plan will become a masterpiece of strategic planning that will lead you to greatness.