Winston Churchill famously said: “He who fails to plan is planning to fail.” From my experience working with businesses, even the best laid out plans fail. In this video, I discuss four reasons that explain how and why businesses plans fail to deliver results and what you can do to change that.
Reason #1: Unrealistic, too many or ambiguous goals
Business plans need realistic and clear goals to work. Have you heard about SMART goals? SMART is an acronym that stands for
What this means is that to set goals effectively, one should be able to track one’s progress, which is why they need to be SMART—specific, measurable, achievable, realistic, and timely.
When we set out to launch our business, we tend to have very lofty goals—and that is not wrong to have. In fact, it is something that a growth mindset will encourage. That said, when you set out to your goal, you need to plan out your steps in order to achieve it. So with the mountain climbing analogy, when making your business plan, identify first which mountain to climb, plan out a manageable route, figure out how to measure your progress every step of the way, and celebrate each milestone your reach.
Reason #2: Incorrect assumptions or ignoring market risks or it isn’t updated.
Plans can become less relevant over time due to it being based on information that was current during at a particular point in time it was being made. But the market landscape can change noticeably from the time since the plan was last looked at.
For example, if you had an online business in 2015, and you created your business plan based on the market conditions back then, you probably would not have anticipated that Amazon would have wanted to enter into the Australian market in 2017. Amazon’s entry into the online market would have a disruptive effect on this market, and that means you would have to revisit the plans and assumptions you made in 2015 to see if these are still relevant.
Tip: A business plan is a living, breathing document—and it pays to revisit and update it whenever important factors change, such as assumptions about customers, competition, or the market environment.
Reason #3: Lack of accountability or follow-through
Goals need action and accountability to be achieved. Ultimately, business leaders must hold themselves accountable for the business’s goals.
Business plans fail when those accountable do not lead their team to achieve these individual steps. They need to follow through and make sure that each step is not only performed but is completed by the set deadline. If business owners and stakeholders do not hold their team accountable, then these people will realise that there are no consequences for lack of action. This leads to complacency and a lack of direction, which, eventually, leads to business plans failing.
It helps when you become accountable to someone else. We are all human. I am accountable to someone else. I have come across business owners who are flexible and forgiving of themselves when they fail to achieve what they have set out to do and when they have no one to hold them accountable. That in itself may result in their business not achieving its full potential.
Tip: Business plans fail when those accountable do not lead their team to achieve these individual steps.
Reason #4: No commitment of resources
Plans don’t get accomplished in a vacuum. For action steps to be accomplished, the business leader should commit the proper resources: people with know-how and training, financial resources, and other supplies and equipment required for your team to carry on those plans.
For example, if your plan is to expand product offerings by introducing a new service to customers, the business leader must be able to commit enough resources to drive this initiative: (1) identify and hire the right people who can deliver this new service, or provide training for existing employees to provide said service, (2) identify and source the right supplies and equipment to deliver the new service, and (3) have a financial budget to afford additional manpower, training, and/or new equipment and supplies. If you do not allocate enough resources for your plans, it will be very difficult to achieve them.
Successful business leaders also know that the best laid out plans can also fail—the key is to keep revisiting them whenever they see that it isn’t working anymore.
I will leave you with a quote from an unlikely source, Mike Tyson. He said,
“Everyone has a plan until they get punched in the face.”
In business, you will get punched, metaphorically speaking, at one point or another, despite having well thought out plans. Mike Tyson does not suggest coming into the ring to fight without a plan at all—successful boxers know that preparation is the key to winning. What he is implying, however, is that there will always be surprises and plans aren’t always carried out perfectly. The key is knowing how to stand back up, to revisit assumptions, to change tack, and to keep the lessons you learned.
If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.
Latest posts by Raymond Huan (see all)
- How To Keep The Entrepreneurial Drive In A Growing Family Business - February 12, 2019
- Overcome entrepreneurial exhaustion - December 11, 2018
- Why being open to innovation is good for your business - November 27, 2018