The question from the reader was:
I started a consulting business a couple of months ago and have too much work. I’m at the point where I have to decide if I should hire employees or farm out certain work to independent consultants. Also, please don’t ask if I have a business plan because I’d rather spend my time making money than creating documents I don’t have time for. What’s my next step?
What? You mean the question you just asked doesn’t make you think about whether a business plan might be more than just a document you don’t have time for? Seriously. How do I decide which way to go but don’t ask me where I want to end up.
Columnist Susan Schreter of the Seattle Post Intelligence has a very good answer, in Inside Entrepreneurship: Make time to create a business plan.
Yogi Berra once said, “You’ve got to be very careful if you don’t know where you’re going, because you might not get there.”
Unfortunately, during the past 15 years or so, business plans have morphed into a marketing tool to raise money. Entrepreneurs just don’t bother to prepare them until a potential grant provider, lender or investor requires the document as part of the selection process. It’s too bad, because useful startup operating plans or business plans are built around a clear understanding of the founder’s desired business destination. And this destination is not vaguely defined as “to make a lot of money” or “to be my own boss.”
Entrepreneurs who say they are overwhelmed by their business rarely have a documented plan in place. Hiring, customer targeting and other important decisions are driven by the needs of the day. It’s what I call the Band-Aid approach to management. It’s patch-driven rather than purpose-driven.
The first step of operating plan development is setting goals and priorities for your business. For example, if success was defined as building the largest market share of a certain consulting field, then you could estimate the number of customers and annual revenues needed to reach this destination. Your hiring decisions would be geared to salaried personnel who could bring in new business and serve customers as well as you do.