Business Planning Traps

Businesses that make regular plans often fall into a trap in that they use planning assumptions that are just not likely to happen. Typically they will adjust their sales assumptions to support their projected costs. This allows them to feel good about keeping things comfortable even though sales have been on a slide for more than a year. Feel good plans are not a complete waste of time since you can use them as a starting place next year, at which time you will probably be forced to make changes because of cash flow.

Another common problem is the failure to review the plan against actual results. Plans need to be regularly revised in order to keep up with a changing business world.

Keeping the plan a secret reduces it value to the Company. Employees can do a better job if they truly understand where you want to go and how you plan to get there. Companies with problems are particularly apt to keep secrets which cuts the efficiency and effectiveness of their biggest asset in a turn-around situation - their employees.

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