The Game Plan – the Difference Between Small Business Success and Failure (Part 1) by Jan B. King
It is an American dream to own a business. But sadly, according to the 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 the 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 the game. A game plan keeps you in the game. To use the sports analogy, it’s easy to see how you are going to win the game in from the locker room. Most businesses don’t have a working plan that takes into account what actually happens on the 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 the 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 the people on the front lines. A game plan talks openly about the good, the bad, and the ugly in the business and is used by people in the 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 the 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 the 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 the 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 the inventory of the items that weren’t selling, and they don’t have adequate inventory of their best selling items. The CEO didn’t really lead, the employees cared more about their bonuses than doing what was right for the 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 the goals, and tools to allow employees to measure their own progress.
In Part 2, “Steps in the Game Plan Process” and “Turning Objectives Into Actions”
About the Author
Jan B. King is the former President & CEO of Merritt Publishing, a top 50 woman-owned and run businesses in Los Angeles and the author of Business Plans to Game Plans: A Practical System for Turning Strategies into Action (John Wiley & Sons, 2004). She has helped hundreds of businesses with her book and her ebooks, The Do-It-Yourself Business Plan Workbook, and The Do-It-Yourself Game Plan Workbook. See www.janbking.com for more information.
by Jan B. King