How to Actually Use Your Business Plan to Run Your Business

Any plan is useless if it sits in a drawer.
Make sure you are taking advantage of your business plan by getting the most out of it. (Photo: Jacob Lund/Shutterstock)

Editor’s note: Tim Berry is a business plan expert and blogger. He is founder and chairman of Palo Alto Software, founder of and author of business planning software and books including “Lean Business Planning.”

You may or may not have a business plan for sharing with banks or other lenders. If you do have a plan, are you really using it to manage your business better? And if you don’t, are you missing out? Either way, adopt a powerful business planning process that will turn planning into management.


According to business plan expert and blogger Tim Berry, good planning leads to good management.

We all know that in business, nothing goes as planned. “The plan is useless,” said former president and military strategist Dwight Eisenhower, “but planning is essential.” In other words, though you need a business plan, you must be prepared to adapt to changing realities along the way, and fast.

It’s easier than you might think.

Contrary to the popular myth, real planning doesn’t require a formal business plan document. If you have that, fine. If you don’t, you don’t have to do a full formal plan to get the benefit of planning. You could do a lean plan, which is just bullet point lists and tables for strategy, tactics, metrics, milestones and essential projections.

With either the full plan or the lean plan, what makes it effective is tracking, frequent reviews and revisions as needed. And that kind of planning, done right, becomes management.

Here’s how to execute it.

Lean or not, full traditional plan or not, make sure your plan includes these essential elements:

  • Strategy. It’s included in your full plan if you have it. If you are doing just a lean plan, lay out strategy in simple bullet points to serve as reminders later.
  • Tactics. Make sure your plan includes tactics to match your strategy. Tactics include pricing, channels of distribution, marketing, messaging, product and service specifics and so forth. Write down the key decisions and check the match between strategy and tactics.
  • Major milestones. Those are dates, deadlines, what is supposed to happen, ideally with budgets and responsibilities assigned for each. Humans work better when we focus on specific events. For example, the new store, the new product, the new website, finding the right sales manager, introducing a new line of business, doing a special promotion.
  • Performance metrics. How will you track and measure performance? It doesn’t have to be just dollars in sales and spending. It can include measurables like leads, closes, website visitors, pay-per-click spending, calls, presentations, trips and whatever fits for your business.
  • Essential business numbers. A lean business plan includes at the very least the sales forecast, spending budget and cash flow. Your full plan probably also includes projected Profit and Loss and Balance Sheet.

Review and revise

Establish a monthly meeting to review results and revise the plan as needed.

Planning isn’t voided by change; planning manages change. The plan is like a route, and the monthly meetings turn that route into something more like a complete navigation system, with GPS positioning and real-time information on weather and traffic.

The secret is plan vs. actual analysis. That’s looking at the difference, in numbers, between what you had planned and the actual results. You don’t have to be an accountant or financial analyst to do it. You just need common sense, knowing your business and tracking what actually happened and comparing that to was expected.

You’ll quickly discover that business plans are always wrong, but there is huge management benefit in looking at how it was wrong, why and in what direction.

The comparison between the plan and actual results becomes something like a dashboard, a view of changes, expectations, results and what ought to come next.

The monthly meeting

Review sessions become second nature in time, but as you start with your planning process, the more detail in the agenda, the better. Include:

  • Review assumptions. If assumptions have changed, then the plan should change.
  • Review milestones. Look at whether or not recent milestones have been met and review progress for milestones coming up.
  • Review performance against expectations. Use the review session to share performance metrics, do plan vs. actual comparisons and identify problems, opportunities, and threats. Let there be some peer pressure as key managers share their results.

The most obvious and standard review is the plan vs. actual analysis of financial results. You have sales and spending, for sure. But look also at results for other key metrics. Look for opportunities to collaborate, not just gotchas. It’s not about finding fault and assigning blame; it’s about working with constant change and managing the business as well as you can.

The result is management

If you work with a good planning process, management is the result. You have a system for review of performance compared to expectations. You have a way to manage priorities and track progress. And you have a dashboard to help you make course corrections.

I say management is like steering. It takes direction and long-term vision combined with short-term constant corrections. Even on a straight highway, you are always working the steering wheel.

Editor’s note: Tim Berry is a business plan expert and blogger. He is founder and chairman of Palo Alto Software, founder of and author of business planning software and books including “Lean Business Planning.”

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