The wisdom of making a plan – then knowing when to change it.
BY: AL SHERMAN
I spent years telling lumberyard managers how important it is to create a formal strategic plan—a plan to follow—a plan to revisit and revise each year. I provided them with forms and formats to make it easy. I told them they needed to step back from the day-to-day stuff and take a longer view.
They told me they were too busy operating to be bothered. I wondered how they could even think about moving forward without a plan. Besides, I was charged with getting plans from these folks. It was my job; it was my highest priority. It wasn’t theirs, though. Their highest priority was to operate their lumberyards.
I’ve spent most of my career consulting in one form or another. I’ve always been an analyst. I never ran a business. I know how to do research and I know how to write plans.
In 2006, I partnered with my nephew and a few of his friends on a retail venture. We wrote a great business plan. It included everything a business plan should have—market potential, industry trends, demographics, buying habits, descriptions and detailed rankings of all the significant competitors, product offerings, pricing, a well thought out pro-forma with multiple scenarios, and an expansion plan—everything. And everything in the plan was supported by research.
Plan in hand, we started our business. We found a great location based on the research we had done; we built out the space; we created processes; we put out products we knew our target customers wanted , and we made the best products we could.
From our first day, business has been booming. Almost eight years later, it’s still great. And I know for a fact that we wouldn’t be here without our business plan—without having gone through the process of learning about the business at every level and doing the detailed research.
Now I’m officially an operator.
I wish I could say that all the years I spent lecturing managers on the virtues of business planning had made me a more strategic operator. I wish I could say that after opening, we used our plan as a road map and regularly reviewed and revised it. I can’t say that, because we didn’t. We ran the operation, solved problems as they came, and made decisions as they presented themselves. And that worked for a while.
Relying on instinct and habit presumes that the future will be the same as the past; that what worked yesterday will work tomorrow. The reality was that outside our four walls, huge changes were taking place—and at breakneck speed. The economy was shifting, ownership structures were changing, industry trends were moving in different directions, and technology was reshaping the way business is conducted. And a new generation of competitors had entered the market armed with detailed analyses of all of these forces and a strategic plan to take our customers—a task made much easier as we remained a stationary target.