Recently I’ve been spending a considerable amount of time working on Semafores’ business plan. I’ve been putting on paper what we want to accomplish, how we expect to do it, when it needs to be done, and how much we think it will cost. I won’t share the details here. There are many pages of them and they wouldn’t be of interest to anyone except for potential investors and our competitors.
While working on the business plan I’ve learned some things about the process. One is that making a business plan is not fundamentally different from planning for a personal goal. You define an overall goal, break it into smaller, more easily achievable goals, and identify milestones that will allow you to demonstrate your progress. The difference is only in the size of the goal and the number of smaller goals that must be reached along the way. In Semafores’ case our goal, for the time being, is to complete development of Curi™, including testing, and to find enough paying customers to be able to cover our current expenses out of revenue. There are dozens of intermediate goals to be reached along the way covering all aspects of the business from design and development to marketing and sales. Each has a milestone that identifies when the goal has been achieved and a deadline that indicates when it needs to be done.
Another thing that I learned is that the business plan cannot be set in stone. When I was researching how to write business plans I more than once saw them referred to as “living documents”, meaning that, like living things, they grow and change. There are two reasons why they must. The first is that the plan is written with less than perfect knowledge. There are many things in the plan—time estimates, budget numbers, salaries of employees we plan to hire—that are just guesses. Many of those are pretty good estimates and I am confident that they are close to what the true values will be. I’m less confident about others. Some we can’t easily estimate because we don’t yet have enough experience, some depend on precisely how users use Curi™, which we can only guess at until people are actually using it. As we learn more and gather user data, we’ll refine our estimates and consider what changes in strategy the new numbers might suggest.
The second reason that the plan must be a living document is a special case of the first. The world is changing every day and we cannot know in advance what the changes will be. The business plan is for the long term; economic condition and our competition won’t be the same when we approach our goal as they are today. If economic conditions worsen, it may be harder to find investors. If a new competitor enters the market with a product too similar to ours we may have to change our marketing plans or the design of Curi™ to better differentiate it from our competitor’s product.
What is true for our business plan is probably true for any complex long term plan. If our knowledge is imperfect or circumstances change in ways we did not expect, we have to be willing and able to change the plan to reflect the new information or circumstance. Success, as defined by the goal we are planning for, may be a moving target that can only be achieved by changing the intermediate goals and milestones along the way.
Finally, in business and in life, reaching the goal of a plan is not the end. Success, as defined in your plan, is only another circumstance. Continuing success will require more planning to reach new goals. Because life and business won’t stop, that work will need to be done before the initial goal is reached, so any success becomes simply another milestone along the road.