When
Showing Up Is Not Enough
"What do you have to do to be better than 95% of the people?" boomed the voice on the radio.
"Show up," came the reply.
"What do you have to do to be better than 96% of the people?" screamed the leader.
"Show up on time," was the next reply.
"And what do you need to do to be better than 97% of the people?" the announcer shouted even louder.
"Show up, on time, with a plan," the audience replied as if they were conditioned.
Even louder than before, the booming voice shouted, "What do you need to do to be better than 99% of the people?’
"Show up, on time, with a plan marked for success," the audience responded in a feverish pitch.
The radio program was a motivational speech, and hearing it as I was driving around town one day left an indelible impression on me. I started thinking how few people I know are in the top 5%. We can all look at this dialogue and relate to it in some fashion. Sometimes it seems that all it does take to succeed, however that is defined, is to show up.
But in the business world that isn’t enough. A major league baseball player would be leading the league with a .500 average if he got one hit every other time at bat. But in most businesses, a .500 average would be disastrous. The difference is in the planning. It is the first principle of management, no matter what textbook is used.
Yet in today’s business world, sparked by a strong economy, businesses are being funded based on a few ideas in a PowerPoint presentation. This often works with story treatments, concept pieces, and the like. Many of us have been fortunate to have been on the winning side of such transactions. And we have all heard about the major Silicon Valley deals that were originated and concluded in a pitch over lunch.
Unfortunately, not all of those businesses have succeeded, causing losses for their investors and management. There are signs that this mentality is changing, forcing entrepreneurs and companies to devise a solid plan before funds are committed. Long-term loss scenarios are a thing of the past. Planning for profits is a must.
I had a meeting a few weeks ago with one of those who thought that a PowerPoint presentation was enough. I suggested that a formal business plan was in order, one that covered in detail all of the business functions and how she and her management team would operate the company.
Entrepreneurs often have lots of great ideas that they can easily spout in meetings with potential investors. However, they sometimes need to present them in a formal document, the formal business plan.
Preparing a formal business plan is not easy and it cannot be done overnight. It requires a focused effort and input from all business functions. The amount of resources required should not be underestimated. And it is not just for startups. Existing businesses, both large and small, should do a plan annually, and it should be more than just a budget exercise.
Even after having written business plans for numerous companies, I find that one of the best resources is Business Plans That Win $$$: Lessons from the MIT Enterprise Forum by Stanley R. Rich and David E. Gumpert.
Since they say it better than I could, below is their list of criteria for a successful business plan. Not all will apply to all companies, but the list is worthy of serious consideration.
- "[The business plan] must be arranged appropriately, with an executive summary, a table of contents, and its chapters in the right order.
- "It must be the right length and have the right appearance – not too long and not too short, not too fancy and not too plain.
- "It must give a sense of what the founders and the company expect to accomplish three to seven years into the future.
- "It must explain in quantitative and qualitative terms the benefit to the user of the company’s products or services.
- "It must present hard evidence of the marketability of the products or services.
- "It must justify financially the means chosen to sell the products or services.
- "It must explain and justify the level of product development which has been achieved and describe in appropriate detail the manufacturing process and associated costs.
- "It must portray the partners as a team of experienced managers with complementary business skills.
- "It must suggest as high an overall "rating" as possible of the venture’s product development and team sophistication.
- "It must contain believable financial projections, with the key data explained and documented.
- "It must show how investors can cash out in three to seven years, with appropriate capital appreciation.
- "It must be presented to the most potentially receptive financiers possible to avoid wasting precious time as company funds dwindle.
- "It must be easily and concisely explainable in a well-orchestrated oral presentation."
It is never as easy as just showing up. Not for you, not for me. However, for the benefit of all of us, show up, on time, with a plan marked for success.
