CWB June 2000


Are You in a Runaway Car?

A business plan will help keep you 'in the driver's seat,' so you can steer your company toward greater profitability.

By Anthony G. Noel


I recently talked about the need to consistently ask yourself if your business is where you want it to be and to enact ways to get there. If you don't, I said that you shouldn't be surprised "if you wake up one day in a car speeding down a steep hill, lost, with no map in the glove compartment."

I consider a business plan to be that very map. Business plans are a recurring topic at the online Woodweb Business Forum, which CWB co-sponsors. (Go to, then click on "The Business Forum.") Forum visitors seem divided about the importance of business plans, but I submit that successful companies owe their success to good planning more than any other practice, whether their owners actually think they are planning or not.

The fact is, differences of opinion on the importance of business plans only surface when the question of formality is introduced. Some owners swear that completing a formal plan is just a waste of what could be good production time. "Besides," they argue, "why draw up a formal plan when I know where I want to go and how to get there?"

Not surprisingly, these same woodworkers often hate being pegged as businesslike. "I'm a craftsman, not an office geek," they say. So the idea of engaging in an activity like formal planning is anathema to them.

Nonetheless, owners and managers of successful companies constantly think about what has worked in the past and what might work in the future. And if that's not planning, I'm not sure what is.

So my question to these anti-planning, closet office geeks is simply this: If you are going to plan in your head anyway, why not jot down a few notes? You might be surprised at how handy it is to have that paper trail later on, when you need to find your way back to the Interstate.

It's kind of like cost accounting. Business plans (heck, businesses themselves) are built upon experimentation and analysis or, more accurately, the lessons experimentation and analysis teach us.

Cost accounting performs a check on the pricing/estimating process. Setting goals and assessing your routes to achieving them — also known as "planning" — is a similar system. It's relatively easy to make plans and set goals. But if you are not also looking at how efficiently your strategies for achieving those goals are working, you are doing yourself and your company a disservice.

This isn't to say that every business must have a formal, ready-to-submit-to-the-bank type of document. But a notebook of goals and lessons learned in reaching for them will aid you immeasurably now and save serious time if and when you need to prepare a more formal plan aimed at securing capital.

Remember that any map is useless if you don't know what road you are on. Even if you do know, a map is more helpful when you can identify the turns you have taken in getting where you are.

Similarly, if you take the time to ask yourself what your business goals are and identify them, and then take a few minutes each day (or week or whenever) to document your successes and failures, you will have clear options. You will find it easier to distinguish between express routes and those fraught with detours.

Still, some owners claim to have total recall or organizational skills mere mortals can only envy. But in my experience (and forgive the generalization), woodworkers and tradespeople as a group tend to be sloppy when it comes to business matters. Though there are some long-time woodworkers who swear they are cruising along just fine without a map, I would counter with this: Would you work to an architect's specifications without a drawing?

Or maybe you are among those with this flimsy argument: "Planning is the first step in abandoning spontaneity and creativity." Hogwash.

Even the most eclectic artisans, though they may be dragged kicking and screaming to begin it, immediately see the benefits of planning. They learn the truth — that original or unique work is much easier to fund when you have a steady stream of commissions for known money-makers.

But exactly which jobs can you produce most efficiently and at a greater profit per hour of work, allowing you the time you need to do more of that speculative stuff you live for?

Your "lessons learned" notebook can answer that and other key questions, such as what you like to do versus what you can barely tolerate, and what tasks are best in your hands versus those of a partner or specific employee.

Compile records of all these things and communicate your findings to the rest of your team on a regular basis. Don't assume everyone "just knows" by osmosis or telepathy or whatever.

And there is another plus to having a documented plan. Having something written down not only affirms what you are good at, it also nudges you to get better in your weaker areas as well, or at least to make you more aware of them.

Planning goals and the strategies for reaching them means asking some hard questions and taking decisive action based on what the answers tell you. It means keeping track of what does and doesn't work and adapting or modifying approaches that weren't as efficient as you had hoped.

Business plans, formal and otherwise, are maps that make your journey easier, whether you are on the road to Greater Profitability or Artistic Achievement.

The best part? Planning can help take you to both places.


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