I recently delivered a keynote speech to a national conference of accounting professionals on the topic: "The Seven Deadly Mistakes of Business Planning". It was so much fun, that I thought I would share it with you over the next several issues of the Planning Boot Camp newsletter. At best, most of these mistakes will lead to lots of wasted effort with no real results. At worst, these mistakes will actually damage an organization's ability to change with the times, grow and improve. As a trusted advisor, you can help your clients avoid them.

In this issue we will look at the deadly mistake of "Planning for all the Wrong Reasons". Watch your inbox for all the deadly mistakes of business planning that you can help your clients avoid.

Planning for All the Wrong Reasons
Over the past several years, I have had countless clients ask me to help them create a plan for the wrong reason. In business planning, you usually get what you want; so if you set out to create a plan to satisfy a corporate requirement, you will get a plan that does just that. Unfortunately, it won't be much use to actually help improve the condition of the business. These plans are quickly forgotten, and the company runs rudderless for another year. I have learned that the first and most important question with any new "Business Planning" client is: what is the plan for?

Although this may seem obvious on the surface, the best business plans are those that are created to help the owner and managers operate their business effectively. Without a clear starting point of how a plan will be used, most plans end up gathering dust. This is clearly a waste of time and effort, yet it happens every day. On the flip side, most great plans are created with a specific purpose in mind; such as attracting investors, or securing financing, or even putting a company up for sale. In small business, this is exactly the kind of focus that an owner often needs to stay on track.

Planning with Purpose
In fact, most of the "forward thinking" companies I work with know that business planning should be hard work, and the first thing they determine is what they hope to get out of the effort that is involved, and which end products will be most useful. These companies never waste their time creating plans that are just window dressing. Planning is also hard work for the people involved, and the end product must be designed to accomplish certain objectives. Their objectives might include:

• Plans that will be used as a blueprint to actually help leaders run the company.
• A plan to externally articulate a company's value proposition, vision, strategy, and prospects to secure financing, or other considerations.
• Credibility among owners, shareholders, and boards that the firm has a cohesive and compelling strategy, with a clear vision for the future and an executable plan in place.
• A clear sense of priorities, focus and energy among the management team.
• A line of sight that all employees can relate to as they attempt to reconcile their duties with the vision and strategy of the firm.
• Understanding and agreement among the management team about where the company is going and how it will get there.

In Practice with Your Clients
Talk to your client specifically about how they intend to use the business plans you help them create. Prompt them with questions like:

• How do you intend to use this plan?
• How often will you refresh the plan?
• How do you intend to track your results versus the plan?
• Will you seek input from staff and managers to the creation of the plan?
• Will you broadly communicate all of the plan, or parts of the plan to staff and managers?
• Will you tie performance bonuses or variable pay to the targets and objectives outlined in the plan?

Before you get started, ask your client what they really hope to accomplish with all the effort you are about to undertake. Don't fall into the trap of helping a client create a plan, just because they do it every year. Staff and managers quickly learn to resent the effort, when they feel like they are contributing to lip service. Help your clients be brutally honest with what they intend to use the plan for, and then communicate your objectives to everyone involved. You might just get what you want!

Next Issue of The Planning Boot Camp Newsletter
In the next issue, I will tell you about the single most common planning mistake on our list. I think when you see it you'll probably say: "what's wrong with that!"

If you do any small business consulting, or if you would like to take your practice to the next level, visit The Planning Boot Camp website for CMA's
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