I’ve seen various versions of the six Ps over the years. Some are five Ps, some are seven Ps. Ranging in both specificity and respectability. I’ve seen consultants and politicians claim credit for these helpful little acronyms. But it was friends and acquaintances from Her Majesties Armed Forces that first introduced me to their six Ps:
“Prior Planning Prevents P*** Poor Performance”
I often wonder if it’s this very association that gives planning such a poor reputation in the modern business world. Visions of a red-faced Commanding Office shouting across a parade ground. Who wants that?
But if you’re running a business, planning can be kind of important.
In August 2021, CBI Insights published their top 12 reasons why start-ups failed based on their research of over 100 failed start-ups. At least four of those reasons can be attributed directly to lack of planning:
- Ran out of cash 38%
- No market need 35%
- Flawed business model 19%
- Pricing/cost issues 15%
Now I’m not suggesting for a minute that when you first start a business you should have it all figured out. Some of the world’s most successful businesses started without a plan. Facebook started as a student networking site. Google started as a graduate school class project to make a better search engine. In fact, some might argue that a Business Plan can hinder creativity, certainly when a Business is in it
’s start-up phase.
Then again, is that really true? Or is that just the story we tell ourself when we’re trying to justify why we don’t have a plan?
No-one said your plan has to be a straitjacket!
Bear in mind, the value isn’t really in the actual plan, the document you produce. The value is in the process of planning. Stopping on a regular basis, stepping back and actually looking at what you are doing. Being ready and able to change course if needed. Nothing says you can’t scribble all over your plan. Make notes in the margin. Completely re-write it if you need to.
Look at those four reasons why start-ups failed. Cashflow is the number one slayer of Businesses. If the Business can’t pay it’s bills, the Business is dead. There is no magic money tree. Hoping that money will appear in the Business bank account tends not to be a winning strategy. A certain amount of planning might be a matter of Business Life or Death.
How about ‘No market need’? Otherwise known as a solution looking for a problem to solve. It’s no good creating a clever app or gadget if it doesn’t actually solve someone’s problem. Perhaps if you had a plan, you might realise there’s no market for your product or service before you invest in developing it.
If anything was going to highlight a flawed Business Model, it must be the COVID-19 pandemic. I’m sure in the coming months it will continue to be cited as THE reason not to plan. “No-one had global pandemic written in their Business Plan for 2020”. I’ve heard it often and that’s actually pretty accurate. Except that in the majority of cases, the Businesses that are thriving right now are the ones that actually stopped, took stock and made a plan to change course, ‘pivot’, to re-write the Business Model. To go online where previously they were entirely face to face. And suddenly find they have a Global marketplace instead of the previous 50-mile radius around their home location. That kind of radical Business Model change rarely happens purely accidentally.
Finally, pricing and cost issues. How did you set your pricing? Was it as simple as looking at your competitor and shaving a quid off their asking price? It’s amazing how often that happens. But what if the cost of getting your product to market is more than the money the product brings in. Would you even know? It’s amazing how many businesses don’t actually know that.
If you don’t, maybe you need a plan. Otherwise, there’s a very real risk your business might just “shuffle off this mortal coil and join the choir invisibule” (to quote the legendary Monty Python’s Flying Circus).
If you are starting to realise you actually need a plan and you don’t know where to start, you could always click here to see how I might just be able to help.