In Business Planning, Form Follows Function

What format do you use for a trip plan, vacation plan, construction plan, or a game plan? Whatever works, right? 

The travel plans are probably a combination of reservations and confirmations, additional information, in a variety of different modes. The game plan is something verbal, in many cases, or maybe some bullet points, or a detailed listing of specific plays. The construction plans are probably blueprints, very carefully drawn and measured, full of specific details.

Like so much of the things we do, the form of these plans is a matter of their function. Nobody says our vacation plan has to be a coil-bound document with integrated charts and tables, starting with an executive summary. Nobody says our game plan has to include specified sections. Builders have very specific requirements for those blueprints. In all these cases the form of the plan is determined by its function. How are people using it?

With that in mind, does it not make sense that the right form for a business plan depends on how you’re going to use that plan? Let’s consider some common examples:

Business plans for most organizations:

For most organizations, business planning is a matter of setting strategy, goals, steps to achieve goals, responsibilities, measurements of success, and projected cash flow, which is based on projected profits, and projected balance sheet. planning is there to optimize the business and business management. You write the key elements down to keep track of them, communicate them to everybody involved, and then track progress on a regular basis.

So what’s the form of this plan? It’s a combination of lists, projections, bullet points, and summaries. Keep it on your computer, but on a network, where the key people can see it. Make sure the comparison of plan vs. actual results are easy to find and understand. Keep it up to date, with monthly updates. Share it appropriately. Sharing a business plan on a network doesn’t mean everybody minds everybody else’s business. Share the summaries and main goals with everybody who understands how to manage confidentiality. Let everybody see the main points of everybody else, but only their own details. And keep confidential information (salaries and compensation, for example) confidential.

Some Special Cases

Some organizations have special needs that mean special functions of their business plans. The most common example is the startup looking for investment, or any organization looking for a bank loan. We also see these plans in academic settings, classes and business plan contests. In these cases we can see that the function of the plan includes serving as a document that explains, summarizes, and commits an organization to goals and performance. Often there is a function akin to sales, selling the idea and the possibilities to outsiders.

So the form of these plans is probably different. They are more likely to look like the traditional formal business plan document, starting with a summary, followed by sections providing detailed information about the organization, what it sells, its market, its strategy, its management team, and its financial projections. Suddenly, because the function is communicating to outsiders, the form of the plan includes being sensitive to what the reader wants to see, how the reader wants to see it, and serving the business purpose.

In these cases, clear, simple, concise writing, good illustrations, and useful summaries are vital. And the contents change according to context. Investors, for example, want to see how a startup plans to make them money in the future. Bankers generally want to see financial track records and payment history, and ratios related to debt and interest. Give the reader what works for the reader. Make your effort service its business purpose.

If you keep the basic principle of form follows function in mind, you’ll be better able to tailor the form of your business planning to match its business function.

About the Author

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, doing social media business planning at smbplans.com, and blogging at timberry.bplans.com. Stanford MBA. Married 42 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.