Sure, financial planning is a must for every entrepreneur, but throwing a bunch of numbers into a forecast is … let’s face it … a guess. Until the venture’s launched, how do you know how many customers you’ll have? Who can predict how the economic landscape will change? Whilst you can make financial projections look impressive on a graph or in a presentation deck, the numbers themselves are usually academic. Each time I planned a new venture, I was frustrated by having to guess what the business would be doing in 12 months time.
The reality is that my own business growth came from many factors you’ll find familiar: a supplier recommending us for a project with a huge brand; a random conversation in a hotel bar opening a new revenue stream; a diversification into a totally new area of business; being reactionary to turn ideas and contacts into pieces of business. I couldn’t have predicted any of these; and they didn’t appear on any plan.
Of course, entrepreneurs can’t simply make things up as they go along. You need a financial plan to show the bank or investors and some strategic goals to hit. But it’s much more important to have the right mindset, being open-minded and fluid about new opportunities than being hindered by a rigid plan that allows no deviation.
‘Unplanning’ your business is not about being totally random; you still need to tick those boxes of having a great idea, a point of difference, an audience and a compelling business model. But too much analysis can kill a good idea; I’ve seen entrepreneurs sit on good ideas for years, hesitant to launch rather than just going for it and testing it out in the market. If you’re looking for funding then it’s more beneficial for the money guys to see your ideas happening rather than stuck on a presentation slide. With web-based tools you can test and tweak your ideas in the market in an instant.
Unplanning isn’t as radical as you might think. Researching this area, I’ve interviewed entrepreneurs and thought leaders including Kevin Roberts (CEO Worldwide, Saatchi & Saatchi), David Hieatt (Founding CEO of Howies), and Tony Hsieh (CEO of Zappos Inc) – they all share my cynicism about long term planning. The lesson is that in an ever changing fast-moving world it’s about being rapid with your idea, not getting stuck in over-planning. The management thinker Tom Peters said to me: “In 2010 in my speeches I claim (and mean it) that I’ve ‘only learned one thing in 40 years’ of business: ‘He who tries the most stuff the fastest wins’ ”
Ian Sanders is a thought-leader, business coach, marketing expert and author, with twenty years experience in business: ten years in organisations and ten years working for himself. He’s helped both big brands and small enterprises with the launch of new ventures, taking ideas to market. At The Ian Sanders Company, he acts as a ‘business potentialiser’ helping clients stay distinctive and effective. Ian is a stimulus junkie; he revels in soaking up and spreading new ideas, applying new thinking to business and the workplace. He’s author of ‘Leap! Ditch Your Job, Start Your Own Business & Set Yourself Free’ and ‘Juggle! Rethink Work, Reclaim Your Life’. He’s been featured in the Financial Times, The Guardian and Esquire magazine and has presented to audiences from South By South West Interactive in Texas to London’s Royal College Of Art. His latest project is ‘How To Unplan Your Business’, which launches at SXSW in March 2010.