Ironically, I posted business planning in times of financial crisis on my allbusiness.com blog a couple of weekends ago, before it was–well, no, I guess it was pretty obvious at that point. Here’s a piece of that post:
The question here for today is what happens to business planning–and specifically, your business planning, for your company–when things seem to be falling apart.
- Don’t panic: Review and revise. Of course you didn’t expect the sudden change of events, but now you use your planning process to get back to what you thought would happen, recognize the changing assumptions, and recover your sense of cause and effect, rework your plan now under this new scenario. Have your long-term goals changed? Does your strategy have to change (some businesses do, some don’t, and you should know which you are and why)?
- Review your strategy: Keep in mind that in hard times it’s generally easier to focus on doing more to keep existing customers than going out and finding new customers. Not always, but generally. Focus more narrowly if you can; sometimes that helps.
- Review your numbers: Start with your sales forecast, then review direct costs, then budgeted expenses.
Was your business plan wrong? Don’t worry, they all are. The value of planning isn’t getting the future right, it’s reviewing and revising and managing the future as it becomes the present, keeping track of the long term without losing the short term.
And, as the storm deepens, I’m reminded that almost exactly a year ago I posted Economic Dark Clouds in the future on Anita Campbell’s Small business Trends blog. What I said then goes just as well today. Or at least, that’s my opinion:
I’m not saying that the major macroeconomic trends don’t threaten you. I’m just saying that your own microeconomic actions are so much more important. Six years ago venture capital was reeling after the dotcom crash, and the larger numbers and statistics showed it conclusively. Life was more difficult for both venture capital firms and the elite startups that depend on them. Some startups were postponed, some turned to other sources, and the vast majority of small business was unaffected.
Thoughtful economic analysis is readily available, fascinating and scary. I don’t know about you, but for me some measure of future fear is a good thing. As president of a small company, being fearful is part of my job. Then I finish my coffee, go to my e-mail, and get back to work.
Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.
