This article was written by Hillel Pitlik, SCORE Orange County Management Counselor
Business Plans for new and existing businesses are written with intense care. But, do we revisit this document periodically as our business proceeds. After we invested all that effort, do we take the time to review the path we described in the plan? Are we proceeding along the predicted path? Without doubt we have deviated. Recognizing those deviations is critical to managing the business.
Why did we deviate? Capturing the reason for change is critical to good management. We must recognize that our original Business Plan was based on many assumptions and guesstimates. So when we deviate from our plan, we begin to learn the realities of the business situation. The defects in the original plan can be overcome by acting logically on the real world situation. When we do so we should record the decisions and the reasons for action. As time goes on we will make numerous such decisions. Without a record of the why, when and how we came to those critical decisions, we will not be able to review our actions and learn lessons for the future.
Businesses that ignore the lessons learned from their management actions are bound to fail. As we move forward, know where we’ve been and decide where we are going. The path is not always a straight line. It consists of twists and turns in response to problems and errors in judgment.
Running a business is a matter of trial and error. This does not mean matters are out of hand. Only that we have learned to respond as each challenge emerges. As time goes by, we get better at making effective responses. But, remember, when we sit down a year from now to lay a plan for the next year, will we remember the critical decisions we made that allowed us to get thru this year? You bet we will! We logged each such decision and the reason why we acted.
Thus, we reduce the probability of repeating past errors. In fact, our plans are better and the number of decision events decline year by year. The log is the diary our business decisions. And a review in retrospect allows us to do better in the future.
Keep on top of your business and it will be there for years to come.