DIFFERENCES BETWEEN BUSINESS PLAN AND BUSINESS MAP
Business Plan: is a 20 to 30 page document that includes the business line, investment amount, products, customer target, sales strategy, marketing, who is the competition, ideological structure, internal mechanics, human resources. It focuses a lot on the “How” to do things.
Business MAP: it is a younger term than the business plan. It focuses on what you want. Not on “how to get there”. It includes where you want to go, and how you break that goal down into small steps. “Milestones”. It does not detail on how to accomplish each sub-goal in order to reach the end goal. It only tells you where you have to go in order to get to the next level. It focuses on the type of business you are in, and then what businesses you are “really” in.
Hello 2019, throw away your business plan
Today, industries change too fast. Technology causes changes in an industry to no longer occur in a couple of decades or years, they occur daily. From one hour to the next your company may already be obsolete. It is the power of innovation that gave us the pace of technology innovation.
The weakness of a business plan
- It takes time to develop: it requires market studies, development of company philosophy, etc. It is not done in a few days.
- It focuses on “how to get” to where we want to go: by the time you designed your business plan, almost certainly half of your ideas will already be obsolete due to the pace of innovation in technology.
- It focuses on the product/service: it is vital to fall in love with your client. Not from your product. (see: Your customer buys emotions, not your product)
On the other side, the map is something very simple to develop. In the case of one of my companies (CPF FRANCIA) we had developed a plan in 2015, and it was not sustainable once the business was launched in 2016. We took 4 months of time and money to develop a plan that when we had to apply it, was no longer up to date. We decided to make a map. In a 3-hour meeting with my partner, we designed a map that allowed us to launch successfully on the market in less than a month..
The strengths of the MAP
- It focuses on the “Why” instead of the “How”: A very simple story to explain the importance of why instead of how comes from a company in which I worked in 2008 as a consultant. They had the need to open VPN tunnels between their IT service providers and their internal servers (we are talking about a multinational that protects its internal network very intensively) but they were afraid. They focused more than 4 years on “How to protect ourselves, how to open them safely so that data does not steal”.
When I arrived I asked them a simple question: “Why is it necessary to open those tunnels?” That question, simple as it is, changed the perspective of the directors of the company. They began to focus on the importance of getting started, and in less than 3 weeks they opened their network to their providers.
Through the next 8/9 months they faced problems that they managed to fix, learning along the way, little by little, without ever damaging the integrity or data of the internal network.
The map is like this. It tells you “Do it”. It is impossible to make predictions of the future. Better to focus on why to do something, and then learn to fix problems. You will always have problems. Don’t focus on them, focus on your goal.
- The map defines the business you’re really in: If you take Apple’s example, you might think “Ok, I’m in the computer business.” But no, thinking like this, you think like your competition and limit the potential of your company. In Apple’s case, it was called Apple Computers in the 90’s until Steve Jobs came back, Microsoft then had 97% of the computer market, and he asked himself “What business do I have to be in?” They cut the name to “Apple” and focused not on making computers, but on connecting the public to their passions: Music, photos, people. Today Apple is the most valuable company in the world, and the income from the sale of computers represents only 15% of its total profits
Questions to create your MAP
- Determine what business you’re in: Many think of McDonald’s as a chain of fast food restaurants. But in reality, it is one of the largest real estate companies in the world.
- What business am I really in? How is business going ?: Those questions are important for entrepreneurs to focus on the industry rather than the business. An important example in the early 1900s is the railroad companies. If they had realized that they were trucking companies instead of rail, they would not have lost 99% of their business to trucks.
When you can answer those questions you will have a more open mind to deliver the right product/service to your customer, innovate against your competition, and take a leading position in your industry.