I have been a reader and writer of business plans since my undergraduate days. During that span of nearly 20 years I have become clearer about what a plan should do. I have also come to understand the secret sauce of effective plans. The one page business plan has been around a long time. I have not been able to find out who came up with the concept or coined the phrase. I personally didn't start using it until 4 or 5 years ago. But I have come to rely on it as an important tool in helping businesses realize their vision.
First, what should business plans do? The simplest answer is that they should give direction, context and meaning to the daily plans and actions of people working in the company. A plan is no good if it does not direct the actions of the team. But this is not the way most plans are written. The most frequent reason people build business plans is to get funding. Let me say that if you are building a business plan for an investor's benefit I hope that person is not a friend or family member. Here's why.
If you are trying to convince someone to put money into your company and you yourself are not able to articulate where the company is going and how it plans to get there then you should not be asking for money. That is my opinion. I think your chances for success are minimal and I think that extra money can only help you dig a deeper hole. We have all heard stories of .com progenies accepting million dollar checks from angels after developing only a few code snippets. That is the exception. Smart investors will not hand over cash without a very clear picture of how you plan to achieve success and some demonstrated ability to do the things necessary to make that success happen.
So let us assume that you are not asking for money. You want a plan for some better reason. You want your existing business to start growing again. You want the business you have just bought to justify the investment made. You want the company that is on the brink to become an industry leader. Or you want to move toward an exit strategy that will be years in the making. Whatever your motives they should be directed at knowing what actions need to be taken this week, this month, this quarter in order to achieve your particular vision. These are great reasons to build a business plan.
But why one page? Isn't more detail better? Shouldn't we try to articulate all the possible bottlenecks, critical paths and possible risks behind each strategy. Yes and no. Yes, you should consider all these things. You should even document them. But I am going to argue that leaving analysis out of your plan is the best way to make it useful on a day to day and week to week basis.
Most one page business plan templates follow a model that moves from left to right. My particular favorite is the one used by Vern Harnish and detailed in his book Mastering the Rockefeller Habits. On the left side you start with big picture stuff like values, mission and vision. On the far right are listed the individual team member's top priorities for the quarter. In between are a range of increasingly specific strategies, goals, and objective measures.
And there you have it. The secret sauce of the one page business plan is that it allows you to keep everything in front of you at once. You can see the 50,000 foot values of the organization and you can see the priorities that must be given attention this week. You have the what I must do and the why I must do it in one place. In this type of plan there is an update every 13 weeks. It never become stale. There is no binder to consult. There is no regional manager to ask for a strategic roadmap. There is only the page with a series of brutally measurable numbers that will tell you if the company is achieving its desired results.
Of course you have to execute and you have to hold people accountable. But the plan tells you what numbers to measure and it tells you what values are good and what values are bad when you take your measurements. Those specifics make accountability feasible. And that is the whole point of the one page business plan. It makes progress feasible.
The problem with 25 or 50 or 500 page business plans is that it is impossible to manage the day to day and week to week activities of a whole team with any long term continuity using those tools. The plan cannot be consulted on a regular basis because it takes too long to digest. It cannot speak to short term priorities because the process of updating those priorities is too inefficient to be effective. The one page plan format only appears incredibly practical because the alternatives are so ridiculously impractical.
If you are interested in simplifying your planning process I would encourage you to get a copy of Harhish's book. It is the most practical business planning and leadership resource I have ever used.