IN THIS CHAPTER

Reviewing the pitfalls to watch out for

Fixing mistakes made in your plans

Including planning tasks you’ve neglected

This chapter lists ten (or so) of those easy-to-make, “I can’t believe I did that” planning miscues. We list them so that you have a better chance of not making these mistakes yourself. But if you happen to make them anyway, at least you know that you’re not alone.

Failing to Plan in the First Place

We’re probably preaching to the choir here, because you’re already reading this book. But neglecting to plan is a business sin so grave that it always merits a short sermon. Planning isn’t easy. After all, you don’t come across any right or wrong answers, and nothing’s guaranteed. But the planning process leaves your company better prepared to face an uncertain future.

Although a business plan may not solve all your problems, it helps. Planning makes you a better manager and makes your company, no matter how large or small, more competitive and more likely to succeed over the long haul. And in case you need a cross-reference to a chapter with more information on the business plan, we suggest you read, well, this entire book.

Shrugging Off Values and Vision

Perhaps you find it invigorating to jump right into the thick of things. You’re itching to line up your products and services, seize the opportunities in front of you, and face down your competitors one by one. This situation is the business version of a roller-coaster ride, and we can’t deny its appeal: ups, downs, and hairpin corners. But roller coasters end up right back where they start — and so will your company, if you don’t stand back and spend some time on the values and vision that set you off in the right direction.

You set up your company’s values and vision statements to remind you where you want to go and what you want to become. Together, these statements are your business compass, so you don’t want to start your journey without them. Check out Chapter 3 to put together your statements.

Second-Guessing the Customer

Everybody knows the cliché “The customer is always right.” Well, it isn’t considered a cliché for nothing. Whether you’re trying to satisfy an individual customer face-to-face or attempting to figure out what an entire segment of the market needs and wants, you ignore what customers tell you at your own peril.

This idea seems so obvious that we hardly find it worth repeating. But you may be surprised by how many companies approach the marketplace with a “We know just what you’re looking for” attitude. Just remember that if you don’t listen to your customers, your competitors will. Chapter 7 gets you closer to your customers.

Underestimating Your Competition

Sometimes you can get so involved in working on your own product or service that you forget the other people out there who are working to develop and market the same product or service. As the competitive heat intensifies in your industry, your competition gets smarter and grows in numbers.

Keeping tabs on your competitors is just as important as listening to your customers. After all, if you want to stay ahead of the pack, you have to know what the rest of the pack is up to. The more you know about your competitors, the better equipped you are to beat them at their own game. Flip to Chapter 8 for more competitive advice.

Ignoring Your Strengths

Why does the grass always seem a little bit greener in the other company’s yard? It usually isn’t all that green when you get up close and look carefully, of course. But you face a real temptation in the business world to think that other companies have all the right answers, the better way of doing things, and the correct approach.

Oh, you can always learn from your competition — no doubt about it. But what works for one competitor isn’t necessarily the best way for you. So don’t forget to catalog your company’s unique strengths and use them to your advantage in the marketplace. Turn to Chapter 9 to spot your strengths.

Mistaking a Budget for a Plan

Putting together your company’s budget is one of the most critical steps in the business-planning process. A budget, after all, is where you make all the really big decisions about how much money to spend and where to spend it. Your budget plays a large role in determining what your company plans to do in the months and years ahead.

But don’t ever mistake your budget for your business plan. The bulk of your plan is all the work that you do up front, before you begin to put your budget together. All the analysis of your industry, customers, competitors, and yourself helps ensure that your financial decisions are the right ones — the ones that move your company closer to your larger business goals. Chapter 12 provides tips on putting together a budget.

Shying Away from Reasonable Risk

Some people jump out of airplanes; others refuse to ride a Ferris wheel. Some of us don’t mind betting the farm; others have trouble buying a lottery ticket. But no matter how you feel about risk, no business venture is risk-free, especially in today’s competitive markets.

Doing business means taking risks, and creating a business plan can help manage those risks. Don’t shy away from making a bold business move — after you do your homework, assess the risk, and deem it a reasonable step to take. A good entrepreneur is a reasonable risk-taker. Chapter 5 clues you in on how to maximize opportunities and recognize threats.

Allowing One Person to Dominate a Plan

Nobody has all the right answers (at least, no one we’ve met). So no matter how big or small your company is, don’t create a business plan alone. Even if you’re the only one running the show, get other people you trust involved in the planning process — at the very least, find trusted advisors to review what you’ve done and provide an outside perspective. (Flip to Chapter 1 for a discussion of who you should involve in your business-planning process.) If you run a bigger company, involve as many people with different points of view as you can in your planning process. The more viewpoints you get, the stronger your business plan becomes. Just be careful not to let the process become too democratic: Chaos doesn’t promote progress.

Being Afraid to Change

All people end up making changes in their lives. Sometimes you don’t have much choice in the matter. Most people, however, prefer to go on doing the same things that they’ve always done, especially if they do them well. Companies aren’t much different. Changing the way that you do business or the kind of business that you do isn’t easy, and change is particularly hard if you already enjoy success. But a good business plan alerts you to changes that your company should make before the industry, your markets, or your competition forces you to make them — changes that allow you to be more responsive to customers, more competitive, more efficient, and more successful and that follow the company vision. Chapter 13 starts you down the road of managing uncertainty, and Chapter 16 provides a concise model for how to do this.

Forgetting to Motivate and Reward

A business plan isn’t useful if it never gets out of your head or off the page. Your business blueprint has to be translated into the efforts and activities of all the people in your company — and it has to make sense. Chapter 16 points out ways to bring your plan to life and communicate it to others.

You have to link your strategy to your vision; link your vision to the company mission; and link your mission to the goals and objectives that you set. Take these pieces of the plan and link them to the way in which you motivate and reward the people around you. Chapters 3 and 4 discuss vision, mission, and goals and objectives, and Chapter 17 points out ways you can become a more effective leader.

Faking It

This may sound weird to you this far into our book. But if there’s one overwhelmingly false move you should never make when it comes to both composing and communicating a business plan, it’s this: Don’t fake it. If you aren’t going to take the assignment seriously, then don’t do it at all. Because if you do, it will become instantly transparent to everyone who really counts in your audience of readers (or listeners). This includes key partners, colleagues, and financial supporters, current or potential. You might not think so, but they’ll see through you like a freshly polished piece of glass. And you will have revealed something about yourself and your business leadership traits that you will likely never recover from. Integrity is earned, not given as a birthright.