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Business Planning Doesn't Have to Be So Bleak

On the cusp of planning season, we thought we'd provide some support for those who are in the midst of developing their business plan, or perhaps are just beginning to revise it from years past. It's true, developing a business plan can be a daunting task, but it pays to take the time to do it right.

We must acknowledge that ineffective planning often has more to do with the planner than with the plan itself. Effective planning requires asking the question, "What business am I really in?" Many business owners and managers have gone bankrupt because they never answered that question. And it's not hard to see why. In any situation, business planning included, it's difficult to ask yourself "What am I really doing?"

Light Bulb Moments
One watch store owner realized that most of his time was spent repairing watches, while most of his money was spent selling them. After several years of trying to develop the sales side, he finally decided he was in the repair business. He discontinued sales operations and focused on developing his repair business. Not surprisingly, his profits improved dramatically.

A bookstore owner shoveled tons of capital into further developing her business. However, it was her writing classes that were in demand … and generating profit. Until she asked herself what business she was in, her advertising dollars and business development efforts were a drain on profits. While her first love was the bookstore, she finally acknowledged that books should be her primary hobby, not her primary business. Now, I hear that you have to reserve a space in her writing workshops several months in advance.

Croghan Colonial Bank recently had a similar situation. During a particular campaign, we noticed that 60% of our new business came from existing clients. However, 95% of our advertising dollars went toward advertising to the public at large. We forgot to ask what business we were in, too. It's a plight we all face from time to time. And it's one of the biggest reasons that our plans too often fail.

Make Your Plan Effective
Despite the struggle developing a business plan can be, the primary reason we all need to write one is because it forces us to crystallize the vision of our company. What do we really do? Who do we really serve? Where is our business going? And, who should we focus on?

At the end of the day, the secret purpose of a business plan is not to have a document to hand to your friendly neighborhood banker (though that's certainly useful), but to go through the process itself. Happy planning!

Michelle R. McGovern
Croghan Colonial Bank
Marketing Director

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