All Business Plans Are Wrong

Business planning expert Tim Berry explains why ongoing planning is essential, even if your initial plan doesn’t get everything right. Duration: 3:15

In Series: Ask Tim Berry

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Hi, I'm Tim Berry and the subject for today is one that's dear to my heart, given that I've been dealing with business plans for the last 30 some years, which is your business plan will be wrong. All business plans are wrong. That does that surprise you, me being the business plan guy? Well, it shouldn't really because I think we use it to illustrate a very important point about business plans.

They don't exist to predict the future. They exist to manage the future, and managing the future means setting down your assumptions, goals, and objectives, and in short, your plan somewhere where you won't lie about what you planned and why. I mean that seriously. I lie to myself. We all do. We forget what we said was going to happen. Months later some of us will always knock ourselves. “Oh, I got it wrong.” Some of us will edit our memory and always get it right. But the point is write it down.

We're human. And — this is really important — even though all business plans are wrong, they're still vital for running a business because you're going to use that plan to track how you were wrong, in what direction you were wrong. It's kind of like a GPS in that we didn't take the track or route that we thought we wanted to take because there was construction or something, but where are we now and how will be get back to the route? So you're always tracking your long term. And when things go different — and they will; that's the point; things are always different from planned — but because you had a plan, when things go different, you can use your plan to track which assumption was wrong and why and where are you now and which direction will you have to take to get back on track.

Thing of navigation like in the ocean. So you're never going to be exactly on course, but you have to know in which direction you're off course to get back on course. So it's just a function of managing the humanity in all of us and in all of our businesses. Understand that planning is like steering. You take your steering wheel and you've got your course corrections on the steering wheel. So too with planning. It's about keeping the long-term direction even though the short term varies and tracking how and why and in which direction. So your business plan will be wrong. All business plans are wrong, but they are still vital to running a business right.

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