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Planning actually makes sense

The great advantage of business planning is that it enables you to see all the aspects of business, as if they were pieces in a puzzle or on a chessboard – so that you can see more objectively and clearly how moving one piece interacts with and affects all the other pieces and so the outcome

Dear Dadu

If “the plan is nothing”, as you said in your last letter, pardon me for asking what is the point of investing all that energy in business planning? Isn’t it faster and better to just jump into business and learn as one goes along?



Dear Sudama,

That is not only a tempting idea, but many people actually do jump into business without planning. It is certainly the faster route. But it is also the more expensive and less effective route.

In which context, let me tell you a story: a few years ago, I worked with an entrepreneur on a business plan. As part of our research, not only did we meet with suppliers and potential customers, but also with other businesspeople in the same industry (not quite competitors) who were kind enough to agree to share their experience with us. Even before we had completed work on the business plan, my client abandoned the idea of the business, as it was evident that there was no way that the particular angle he was thinking of could be profitable. The time, energy and money “wasted” on this research and business planning were far less than my client would have wasted if he had jumped into starting the business.

On the other hand, if all your research and business planning does reveal a route to profitability and business success, you have to learn enough to survive the shifting shoals of the marketplace.

One of the keys in any business is to define, as tightly and precisely as possible, who your customer is, otherwise everyone tends to look like a customer. Once you have identified your customer, it is that kind of customer who you must research and understand. Your customer is the final test of your business plan and business model. And, even after you are well established in business, your customer’s changing behaviour, needs and preferences must be your constant study, so that you can constantly try to improve your ability to satisfy your customer.

However, even though “the customer is king”, the other pieces on the business chessboard are also very important – for example, technology, suppliers and employees.

Technology is important because it can enable you to extend the reach of your business, to cut costs, to reconfigure your internal processes, and so on. If you keep applying the possibilities offered by new technological developments you are likely to continue having a competitive advantage over rivals who are not doing so.

Cultivating good relations with suppliers is important because they can increase or withhold not only credit but also vital market information.

Ensuring you have the right employees, and that you are motivating and controlling them well, is essential because, particularly as your business grows, each of your employees is the face of your company to your customers. The success of your business lies in having happy and trained employees, motivated to find the best ways of serving your customers.

Equally, no one is as much of a danger to your business as your employees, because they are in the best position to commit fraud. Every business relies on trust, but that needs to be supplemented not only by controls but also by a constant effort to nourish good relationships and the right internal culture.

Critically, you need to have people with the right attitudes and skills in the Purchasing and Accounting functions. Consider what will happen if the accounting person is not producing the correct figures or, worse, is actually manipulating them for personal benefit. Or consider what will happen if the wrong supplies are ordered or accepted, or if they are at the wrong price, or with the wrong frequency.

That brings up the question of cash flow – whose importance it is easy to underestimate. If lots of people owe you money, it does not help you to pay your bills – and it is non-payment of bills that leads to bankruptcy. In other words, you can have a highly profitable business and yet go bankrupt if you don’t have customers paying your bills in time. Profitability is important, but it is an entirely separate matter from cash flow. And both profitability and cash are equally important – in fact, cash flow is even more important because that is what enables you to survive as a business.

The great advantage of business planning is that it enables you to see all the aspects of business, as if they were pieces in a puzzle or on a chessboard – so that you can see more objectively and clearly how moving one piece interacts with and affects all the other pieces and so the outcome.

Some final words of advice:

  1. Never fall in love with your idea, or way of doing business, or even your business itself. Love is great but it does cloud business judgment and can lead to ineffective decision-making. Sometimes one has to cut away what is not and never will be profitable; at other times, one has to be aware that selling one business is the way to release money that can be better employed.
  2. The opposite of “jumping in without thinking” is perfectionism. Don’t waste time looking for “the right” answer. There is no perfect moment, product, service or opportunity. Usually, there will be many answers that can work because, as with a chessboard, there are different alternatives, and your ability to win depends partly on the moves made by other parties.
  3. Get busy, stay busy and do the best you can to make your business succeed. But never forget that you not only have to consider what will solve the immediate problems you face today, you also have to prepare the ground so that you are in an advantageous position to address challenges that will come upon you tomorrow.

With love and prayers for every success,


This concludes the series on Entrepreneurship. If you want Dadu to answer your questions email him at askdadu@gmail.com


Published in the April 2014 issue of the Forward Press magazine

Forward Press also publishes books on Bahujan issues. Forward Press Books sheds light on the widespread problems as well as the finer aspects of the Bahujan (Dalit, OBC, Adivasi, Nomadic, Pasmanda) community’s literature, culture, society and culture. Contact us for a list of FP Books’ titles and to order. Mobile: +919968527911, Email: info@forwardmagazine.in

About The Author


“Dadu” is an avuncular Indian gentleman who has lived and worked both in India and overseas in the academic, business and cultural fields. He welcomes your questions on broad social, economic and cultural issues

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