Why do business plans fail?

Everyone knows the old saying “Failing to Prepare is Preparing To Fail” from Benjamin Franklin.

But what happens if you do plan and you still fail?

Only a fraction of business plans ever pan out perfectly. Even the most robust business plan can fall apart when applied to the real world and written ideas bomb. This can be compounded if a business owner insists on sticking rigidly to the plan, labouring under the belief that once a goal is set, it needs to be pursued, no matter what.

Business plans are fluid

For business owners, sometimes one of the most challenging lessons to learn is…..

Be prepared to abandon a path in an instant the moment you discover it is leading you the wrong way.

After putting time and energy into doing something a particular way, it’s very difficult to abandon it. Giving up on a plan you’ve been pursuing means (a) you’ve been wrong, and/or (b) you’ve been wasting time. Either of these thoughts can be hard to accept. The easy solution is to keep going in the same direction, even when you suspect you’re spinning your wheels, perhaps way off course.

We’ve all been guilty of this in the past, and we’ve seen many friends and colleagues make the same mistake, haven’t we?

What are some of the common business plan mistakes?

So, why do business plans fail? There are many common planning flaws. Some will be unique to your organisation. But if you can identify these early on in the process, you can take the necessary corrective measures. Worst case scenario, you scrap the plan and develop a new one based on the additional insights gleaned from experience.

Here are some common business plan pitfalls:

Unrealistic goals – while it is tempting to set yourself lofty goals, these can often cause your plan to fail. Particularly if the plan is not broken down into smaller, manageable milestones that help you achieve the greater goal.

Unclear objectives – if your team lacks clarity around the objectives, it is much harder for them to focus their activities on that objective. It is easier, though, for them to get distracted by non-core activities or to even start working in a completely different direction.

Lack of detail – if your plan lacks detail, your employees won’t know exactly what is required of them or when. The leap between progressive tasks may appear too challenging or open for interpretation, putting your plan at risk.

Loose deadlines – in a detailed plan, each task typically relies on the preceding task to be completed before the plan can move forward. If bottlenecks build up due to missed or constantly extended deadlines, the plan will fail to progress consistently. Achievement of the final goal gets pushed further and further out, hampering the desired business growth. It also can be very demotivating for the organisation if it takes too long to reach the end game.

Undefined measurement metrics – if you don’t know how to measure your success, how will you know if you ever achieve it? Without specific criteria that measure your progress toward accomplishing the goal, the results become a bit fuzzy, and collectively, can derail the plan entirely.

Business plan success factors

Realise the plan is a working document. Review it regularly and don’t be afraid to change it as soon as an issue is uncovered. Adapt rapidly, and then review it again within an agreed timeframe.

Set achievable goals. Look at what is needed in the next 3, 6, 9, 12 months in your business to accelerate its growth and set yourself pragmatic goals. Then factor in a bit of stretch to make those goals inspiring.

Create a granular, step by step, action plan. This acts as a blueprint for you and your team to follow as you implement the overall plan. It will also encourage your team to stay focused and aligned with the purpose of the plan.

Be clear with your staff about your goals and plan. Break down the action plan. Assign staff members defined roles and responsibilities and allocate relevant tasks accordingly.

Continuously measure progress. It’s crucial to track your progress regularly. It helps to keep you motivated, focussed and enthusiastic about your successes so far. Be firm about what evidence is required to confirm a milestone has been reached. Is it a 10% increase in sales or recruiting three new staff members by the end of the quarter? As a business owner, you may set a target of one day a week out of the office thanks to handing over more responsibility to your team.

Celebrate each success, no matter how big or small. It takes time, and hard work, to fulfil all your dreams. Recognising your wins along the way will keep you driven, give you a sense of accomplishment. It will also encourage your team to continue to excel and remain committed to the ultimate goal.

If, despite thorough planning, your plan does still happen to fail, stay positive. View it as a learning opportunity, even if you must change direction completely. Remember, it’s not a failure to walk away from an unrealistic goal. It’s not a failure to adapt your plan to give it a greater likelihood of success. But failing to learn and pivot is.

PS: you read more about goal setting in our previous blog Goal Setting for Success or even better yet contact us and start working on your action plan for Q1 2022.

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