It is an American dream to own a business. But sadly, according to U.S. Department of Commerce, only 1 in 5 businesses is still in business 5 years after it opens.

A business needs a great business plan, but it doesn’t give management enough information to have a successful, profitable business. You dramatically increase your chance of success with a game plan. According to a PriceWaterhouseCoopers survey, over half of fastest growing firms not only have business plans, but also have separate game plans to keep them focused on what must be done day to day.

A business plan gets you in game. A game plan keeps you in game. To use sports analogy, it’s easy to see how you are going to win game in from locker room. Most businesses don’t have a working plan that takes into account what actually happens on field once play starts.

A business plan is a sales brochure and a game plan is an instruction manual. You send a business plan to potential investors and others to excite them about business. A business plan is about strategy. You create a business plan at a management meeting. A game plan is about tactics and is created by and for people on front lines. A game plan talks openly about good, bad, and ugly in business and is used by people in business to make decisions every day. It talks about what to do in a crisis.

Here’s an example of what I mean:

The CEO takes a look at his balance sheet and decides that his company has too much of its cash tied up in inventory, so he gets his managers together and creates a new corporate objective for year - to reduce inventory by 25%. If they do that they will all be entitled to a bonus. The managers aren’t stupid – they know only way to reduce inventory is to sell what they can and not replace it. So they put on a special promotion for their hottest selling items, they reduce inventory of those to almost nothing, and they get their bonus. But what has really happened here. The CEO’s company is now left with inventory of items that weren’t selling, and they don’t have adequate inventory of their best selling items. The CEO didn’t really lead, employees cared more about their bonuses than doing what was right for company, and there wasn’t a plan of action that was tied into a meaningful company objective.

A game plan focuses on these things: creating big goals that matter, giving individual employees responsibility to carry out their portion of those goals, creating a budget and a reward system that supports goals, and tools to allow employees to measure their own progress.

Steps in Game Plan Process

I found it important to clarify for employees what “deal-breaker” behavior was at my company. These are things I insisted would not be tolerated and would lead to immediate or ultimate termination, depending on nature of infraction of these hard and fast rules. Here are behaviors I would not tolerate:

1. Gossip. Rumors can be incredibly disruptive to a company. A lack of information can get rumors started, and frank explanations can usually stop them. However, some employees thrive on admiration of others when they seem to be “in know.” Define gossip as clearly as you can and tell employees what you expect them to do when they hear it. First and foremost, that you don’t repeat it. Along same lines of gossip, remind employees that all e-mail sent or received on company computers is considered company business and not private correspondence.