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Jan
31

What is a Business Plan?

Posted January 31, 2013 by in CEO Updates

Mr. Chong Chee Wah
Founder & CEO

Dear Readers,

There is a Chinese saying – 一年之计在于春, 一日之计在于晨. This simply means that the planning for the year begins in Spring and planning for the day starts in the morning. It is not surprising that big companies, enterprises, and governmental agencies focus a lot of their work plan discussion in Jan of each year. Everyone wants to plan properly at the start of the year. Everyone wants to start on the right footing.

Coming from a background of working in big organisations and civil service, I have personally been part of such work plans formulation. We need to decide what we want to achieve, the budget allocation and past year’s performance. We need to come up with Key Performance Indicators to justify our own performance at the end of the year. No point having a plan that we can’t measure ourselves ! We used various tools – 6 sigma, balanced scorecards etc etc. I went through various cycles and though each tool or techniques seems different, i felt personally, that the tools are essentially the same. The objective of planning is to have roadmap that will, hopefully, tell us with some degree of accuracy where we would like to head to, with some measurable outcome at the end of the year.

After starting my own companies, I thought I can finally do away with the long business planning process. Unfortunately, for a start, I do need to write long business plans for investment purposes. These business plans are a good exercise for me to crystallize my thoughts about the business. However, I always find the business plan too much to digest. As I progress, I begin to rely less and less on business planning and shifting towards just powerpoint slides to sum up the plans. However, I wasn’t satisfied. I feel that precious time (management time) has been wasted in looking at the powerpoint slides. I need to find a better way. Recently, I paused and asked myself seriously what is a business plan? What do I aim to achieve in writing a business plan or what do I want my team to know? This is Jan of 2013, it is certainly an apt time to look into these questions before I embark on another long work plan or business plan drafting process.

What is a business plan? Even more fundamentally, what is a plan?

On a personal level, I note the importance of a plan. Though in start-up, things never really follow a plan. Nevertheless, we can’t wander aimlessly. We still need a destination to aim for. Whether in archery or in soccer, there is always a goal – to hit a target. With the target, it is clearer that we have something to aim for. An arrow, no matter how sharp it is, it is nothing if it is never aimed at a target to be shot at. A goal is very important.

Next, is where I feel the main difference between a start-up and a big corporation. As a start-up, we do zig-zagging. I believe that we can never rely on the original plan and execute hell out of it. By nature of start-up, things change and things change all the time. We would constantly need to change our plan to suit the changes, but have a focused eye on the target. Execution can change.

Hence, to me, a business plan should be very simple. It should be a clear piece of information on how the business can be successful. How a business can be successful, depends on which market that the business wants to focus or capture. How the business wants to focus and capture the market, would then depend on the “how”. In short, a business plan is to tell us which market should we be focussing on and how are we going to win in that market.

Tactically, the “how” should be flexible and adaptable to changes while the “which” is a more important strategic decision that a business needs to make. A change to “which” should be allowed though it would be costly in terms of resources.

 

With best regards & a Happy Lunar New Year,
Chee Wah