The Game Plan –
Difference Between Small Business Success and Failure 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
The game plan requires a series of steps, beginning with
CEO getting in touch with his or her desires for
business. Then,
management team must delve into what is real for
business today – understanding
business model (how
company makes money), having a handle on what is happening in
market, and finally, knowing what is happening in
company culture. With all this background work done,
actual creation of
game plan begins. At best, it is a facilitated process of discussions matching what is real today with what is possible tomorrow, in
long run and in
short run.