INTRODUCTION TO THE FIRST EDITION xvii
Introduction to the
First Edition
‘Everyone knew what Walt wanted. Everyone had objectives. Both were communicated all
the way down the line. The management layer was flat and responsibilities were clearly
defined. We had a good self-image and the company ran well.’
Does this quote from a former Walt Disney executive apply to your business? It could do.
It contains two important ideas. The subliminal message is that Walt had to know what he
wanted before it could be communicated. Knowing what you want is what business plan-
ning is all about. It is fundamental to business success. The other important suggestion is
that when you know what you want you have a useful management tool to help you run
a successful business.
Back to Walt. He had two characteristics that are important. First, he knew about plan-
ning. The movie business requires meticulous planning to turn a dry script into a lively
strip of celluloid. You do not hire a million-dollar actor so that he can sit in his trailer drink-
ing whisky while the set is prepared – you schedule him to appear when you are ready
to film. You do not keep changing location to shoot the script sequentially. You take all
the shots for one scene at the same time and then juggle them with the other footage to
assemble the story in the correct order.
Second, Walt was a visionary. You have to be, in order to take a concept and turn it into
a successful movie. This does not necessarily infer that you have to be a visionary to run a
business, but you do have to develop a vision for the future. An excellent way to do this is
by preparing a plan. Let me give you an example.
A few years ago, a famous bank’s customers included two with very similar businesses.
Both were in their 30s. After serving apprenticeships as printers’ devils they were eventu-
ally made redundant by changes in technology and working practices. They did not know
each other when they used their redundancy pay to start their own small businesses
doing what they knew best – printing – in different areas of a busy city. This is where their
fortunes began to diverge.
One of them set up in an old garage just off the main shopping area. He started with
second-hand equipment. Passing trade kept him busy and he would sometimes work
through the night. Within a few years he took on three young assistants. He earned a sat-
isfactory living, had a comfortable house and a new family car, and sent his children to a
good private school.
xviii INTORDUCTION TO THE FIRST EDITION
This man was reluctant to spend time planning because, as he said, his company was
small, reasonably successful, and he understood exactly what he was doing. Eventually,
to support his overdraft renewal request, he wrote what might be described as a fairly
adequate plan. It described the business well, but the future was little more than an
extension of the present. The enforced planning exercise helped to focus his thinking and
improve some areas of his work, but he remained bogged down by operational issues.
The other young man had a tough time to begin with. His print shop was well fitted,
but located in a small industrial park hidden behind a vehicle depot. He worked alone,
failed to pick up much passing trade and times were hard. He was obviously bright and
motivated. He did not know how to progress and was very receptive to the idea of devel-
oping a plan when it was suggested to him.
He looked long and hard at his market and identified areas where business could be
developed. He did not do anything difficult. He just worked through a logical process
using some of the advanced but straightforward techniques described in this book – and
arrived at some solid conclusions. Understanding his business, competitors and market
helped him develop a view of where he could go in the future. It enhanced his vision. And
because he knew his business, it was easy for him to develop a strategy for realising it.
Turning a strategy into an operating plan is not complex.
He wrote a short report explaining what he wanted to do and how he would do it,
and the bank lent him the required money. He followed this plan and used it to moni-
tor and manage his business through periods of recession and boom. When he took on
new employees he explained the plan to them, and gave them appropriate responsibili-
ties and objectives. The business ran smoothly and grew rapidly. Eventually he was happy
to sell out to a big printing company for considerable riches.
There are three or four important points. Both businessmen increased their success as a
direct result of developing proper business plans. The entrepreneur who used superior plan-
ning techniques did better for it. He gained further because the plan was used effectively
rather than being left to rot in a drawer. Moreover, no business or business unit is ever too
small for a plan – yet the same planning methods apply equally to major corporations.
Planning is a worthwhile exercise and it is worth doing it well. Business plans contrib-
ute to all activities – commercial and non-profit making. A business plan sets out where
you are. It shows you where you are going. It identifies landmarks so that you can check
your progress. And it helps you in steering around the inevitable obstacles. It can help
you to shape your vision and make effective use of opportunities and resources such as
people and equipment.
This book is a practical and pragmatic guide based on experience in many parts of
the business world. The techniques – the planning methodologies – described here are
proven to be effective. They provide a fast track to writing a business plan, a mechanism
for a more considered approach, and a framework for analysis. The ideas and illustrations
are aimed at helping you analyse a business and develop an intelligent business plan. This
knowledge and the hints and tips show you what to watch out for in other people’s plans.
INTRODUCTION TO THE FIRST EDITION xix
The book also takes care to explain how to obtain approvals for a plan, how to finance
your ideas and how to use it to steer a business.
In summary, the book shows you how to:
assess the current status of a business, including skills, resources, products,
markets and competition;
define vision, mission, values, the core objective and operating objectives;
develop strategic and operational plans;
create financial forecasts, cash flow projections and operating budgets;
value a business and assess return on investment;
pull all this together into a well-written business plan;
make use of a surplus or decide where to look for the funding;
determine what type of funding is required (if any);
obtain the necessary approvals and funding;
use the business plan to run a business efficiently and successfully.
The book will benefit the newcomer and seasoned veteran alike. No special prior knowl-
edge is required. It is written for anyone who needs to produce and use, or even approve,
business plans, whether a director, executive or manager, and whether in a major corpo-
ration, a smaller business, a new enterprise or a non-profit making organisation. You may
well be concerned with a full business plan. Or perhaps you need just a part of it: a stra-
tegic plan, a marketing plan, an operational plan for one activity such as a research and
development or a construction project, or a financial plan.
Whoever you are, whatever your business interests and whatever your perspective on
business plans, this book is for you. I hope that it helps you to achieve success.
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