You’d think it would be obvious, but the business plan is supposed to be whatever it needs to be to solve the business purpose. For example, only very few business plans ever have to be documents – well formatted and carefully presented – to back up an investment pitch or loan application. While those uses exist, the vast majority of business plans need to be not pretty documents, but rather specific collections of lists, such as objectives, focus, tactics, specific activities, specific responsibilities, deadlines, performance expectations and so forth. They can exist in different formats and live on a computer, or a network, where multiple people can access, use and contribute to them.

The plan itself is what’s supposed to happen, and why, and how much of this and that and when things are supposed to happen. The document, the pitch, the elevator speech, and the summary memo aren’t the plan; they are outputs, or summaries, of the plan.

So why do we write it down? So we can review it every month, see what went right and what went wrong, and make course corrections. You can’t review the results of your plan if you didn’t write it somewhere. But don’t waste time making it pretty. Business plans are perishable, like food. Their shelf life is just a few weeks.

What makes a good plan? Not the writing, editing or formatting. Not even the ideas, the details, the strategy, the analysis or research. What distinguishes a good plan from a bad plan are the results. I’m quoting some of my books here, but the quotes apply:

• A plan is worth the decisions it causes.
• A good plan is nine parts execution for every one part strategy.

In a business landscape changing rapidly because of new technology, the business planning is more needed than ever before because the traditional means of management and accountability are crumbling. It wasn’t that long ago that we could measure productivity by how warm the chair was, meaning how many hours so-and-so spent in the office. Now, with the world splintering and physical presence not so important, we measure with metrics, numbers – actual performance. And for that, we need planning to establish the expected measurement numbers and then to review the results and see what comes next. Planning is the key to accountability.

Why should I plan, people ask? “Things are just going to change,” they say, “there’s no point in planning because things move too rapidly.”

The people who say that are missing the point. Planning is a process that manages change. The plan establishes expectations and the plan review analyzes results and creates revised expectations, in a step-by-step process that is something like steering, lots of small course corrections.

In a business landscape changing rapidly because of new technology, the business planning is more needed than ever before because the traditional means of management and accountability are crumbling. It wasn’t that long ago that we could measure productivity by how warm the chair was, meaning how many hours so-and-so spent in the office. Now, with the world splintering and physical presence not so important, we measure with metrics, numbers – actual performance. And for that, we need planning to establish the expected measurement numbers and then to review the results and see what comes next. Planning is the key to accountability.

The basic numbers included in a business plan – projections of sales, costs, expenses, profits, salaries, assets, liabilities, capital and cash flow – look like the reports we see in bookkeeping and accounting, but they are very different.

Accounting starts today and goes backward in time in ever increasing detail.

Planning, on the other hand, starts today and goes forward in time in ever increasing aggregation. We can’t project the future in detail; it’s a waste of time because the level of uncertainty is too deep. So we project a year in months and then the next two years on an annual basis, and that’s enough.

The good news is that this makes planning easier than a lot of people think. Just make sure, if you work with an accountant on planning, that he or she understands that 1) this is educated guessing; and 2) nobody is going to blame the accountant if it’s wrong.