Why Most Business Plans Are Doomed to Fail

Think about business planning like planning your wedding. When you plan your wedding you start with the big picture (your perfect day), you then break it up into its essential elements (venue, catering, photography, guest list, ceremony, budget etc), you organise what needs to get done and in what order (book venue, decide on guest list, send invites etc), develop a series of action plans (to do lists) and then delegate tasks to your team (unsuspecting family members). You monitor progress frequently and make adjustments to your plan as you go... but you never loose sight of the big picture (your perfect day).

If most people can plan their wedding day, why do most companies fall short when it comes to business planning? Studies show that only 10% of business plans are effectively implemented. Why? In our experience, failure comes down to seven key factors:

7 Reasons Why Most Business Plans Are Doomed to Fail...

#1 - The plan is too short sighted...
Most businesses lack a long term vision of what they will become. Often business plans focus on achieving unrealistic short term aims, without any perspective about where they want to be in the long term. The most successful businesses have a well articulated, long-term B.H.A.G. (Big Hairy Audacious Goal) which clarifies their direction and guides their planning.

#2 - Biting off more than you can chew...
Geoff Ross, Founder of 42Below, once said, “Bite off more than you can chew and keep chewing”. While this approach worked for Geoff, many business plans fail because they attempt to take on too much at one time. To make sure you don’t choke, you need to break down your goals into bite size chunks. Think of your business plan like a degustation meal (10 courses) that you enjoy over the course of the evening rather than a university burger eating competition.

#3 - The plan is too complicated...
A lot of business plans have too many moving parts. A breakdown in one part can cause the whole plan to collapse like a house of cards. Complicated plans have lots of detailed and intricate steps that take time to develop, are hard to communicate and harder to implement. The best plans are simple. By using an effective planning process (such as APT or the One-Page Business Plan) you can simplify your strategy by taking a complex situation and reducing it down to a few key actionable parts.

#4 - Focusing in the wrong thing...
Vilfredo Pareto, the famous Italian mathematician, discovered the 80/20 rule in 1906. It basically states that 80% of your results come from 20% of your actions. Many business plans include initiatives that are seem like a good idea, but at the end of the day don’t contribute much to the result you are aiming for. While working on these “seemingly good ideas” businesses are distracted from working on what really matters... the top 20% result pulling activities.

#5 - “Business as usual” takes over...
Many businesses are re-active in nature. When they get busy with the day-to-day “business as usual” activities, working on the business plan goes out the window. To successfully implement a business plan,  you need to be pro-active. Being pro-active means taking a long-term view and making the implementation of your business plan a priority. That is, you need to make implementation your “business as usual”.

#6 - No Accountability...
There is “making accountable” and “keeping accountable”. If no one is made accountable to implement the plan (or specific parts of the plan), nothing will get started. If people are made accountable, but no one is kept accountable, then nothing will get finished.  

#7 - Poor Leadership...
In a previous newsletter we outlined the 3 Steps to Business Success: 1) Create an Inspiring Vision; 2) Develop an Effective Plan; and 3) Put the Plan into Action. This is the role of leadership. Poor leaders are those that lack vision and direction, place no value on strategic planning and fail to lead by example. At the end of the day, the buck stops with you...