A couple of years ago Antonio, a good friend of mine, decided to open a bar in Pantelleria, a small island 70 miles off the coast of Sicily. Its turquoise lakes and volcanic landscapes are persuasive enough for Giorgio Armani to split his time between Milan and the island. Madonna and Sting are regular visitors too. But if you go to Pantelleria today you won’t find Antonio’s bar anywhere, and it’s not for the reasons you might expect.
Antonio had the foresight to produce a business plan. He used the structure of the plan to feel his way around the opportunity. Who were his customers going to be? He spent time on the island chatting to the locals and to the tourists. What was the competition like? Dedicated, late night partying in the handful of bars already on the island was the only way to answer that question. How much would it cost? He found an old villa, produced plans to convert it to a bar and worked out what the running costs would be. Once he’d been through the process he could see that his head clearly contradicted his heart. There was no way he could make it work.
I count this a success. The process of creating the plan helped Antonio make the right decision. Planning saved him months, if not years, of disappointment and misery.
It’s not the powerpoint slides or the twenty page document that counts. The colourful hockey stick graphs, quadrants and pie charts do not matter. It’s the act of production that is critical. A business plan provides a framework for thought. You’re standing on the edge of a chasm, in the dark, ready to leap. You need to know that a better place lies across the gap, and that you’ve remembered to tie your shoelaces.
Here are some more reasons why it’s the process that counts:
- Helmuthe von Moltk, the chief of staff for the Prussian army said no battle plan survives contact with the enemy. You need to think about different outcomes, and understand the lay of the land.
- If you’re setting up in business with somebody else – and I recommend that you do – then a plan has another advantage too. It’s a way of reaching a shared understanding about what you’re trying to do and why you’re trying to do it. It will force you to check that you share common assumptions and goals, and that they hold true.
- Writing can be a good way to think. Putting your thoughts down on paper forces you to crystallize them.
Once you’ve written your plan, you’ll put it in a drawer and leave it there for twelve months. The next time you read it, it will be to have a good laugh about how wrong you were.
So write your plan – that’s important – and then burn it.