Planning for Success

Planning for success can become more of a science than an art form when there is an understanding of business life cycle principles and the ability to identify the characteristic traits of each growth phase.

Entrepreneurs that succeed are typically the ones that can see the forest from the trees. They stay focused. They review new opportunities, but are also aware that pursuing them often takes them away from achieving their objective.

Here’s a framework for planning through the various stages of growth from start up to maturity. Each stage has its constraints and opportunities. Identifying the barriers that prevent business owners and entrepreneurs from moving successfully through each stage is the key to planning for success.


Central to your approach is learning to view your business as a separate entity. In a nutshell: you are not your business. When you realise that your business is your product, you can step outside and reinvent it. It starts with entrepreneurial thinking.

The mindset of an entrepreneur is: I’ll build the business; someone else does the work. Even when a business owner is also the primary “producer” of business it's critical that the business is set up to support that structure. You have to work on the business to the point where it can support you to work in the business. The systems work so you don't have to.

Starry-eyed Enthusiasm 

As a business grows, it moves through a series of distinct phases that make up the organisational life cycle. Each has a unique set of identifying characteristics and problems that befall all entrepreneurs and business owners. The benefit in using this prism in planning is that the problems are unchanging and highly predictable. By knowing where your business stands in the life cycle, you can identify these major barriers to growth before they occur.

Starry-eyed enthusiasm or “infancy” is the stage of a business’ life cycle that eats money like it's going out of fashion. Consequently planning has some obvious imperatives: long hours, making sales and keeping the cash coming in is paramount so plan for anything that will speed up the underwriting process; fast medical checks and good financial evidence.

Planning pointer: Track cash flow before profits. Rather than using traditional monthly P&L statements to monitor your company's financial performance, use a 12-week rolling cash flow report. Forget about profits and watch cash flow like a hawk.

Sophisticated confusion

At this stage the business manages to establish ongoing sales with some level of predictable gross margin. With revenue, the entrepreneur pursues one opportunity after the other. But at this stage planning needs to cover what many entrepreneurs consider “boring” – infrastructure, internal systems, budgets, policies or procedures.

As the business starts to grow in all directions the founder gets spread alarmingly thin. Things begin to fall through the cracks. During sophisticated confusion, the founder always reports progress in terms of sales growth.

The planning pointer: Stay focused. Carefully analyse the case for any new venture or expansion. Ask:” Do we have the core competence, knowledge and skills to take this on?"

Towards the end of the sophisticated confusion phase you need to plan for succession - not the retirement version; rather succession and transition from founder-entrepreneur to chief executive by hiring an experienced manager from outside the business to institute rules, regulations and policies. In other words to write The Manual: This is the Way we do It Here. 

Planning pointer: watch out for the Founder's trap. This is the big one in planning for success – and it comes when the founder often finds it impossible to let go. The entrepreneur wants other people to make decisions, but doesn't trust them to make the right ones. Until the founder learns to delegate, the company can only grow to the extent of his or her abilities.


This is the payoff of all the hard yards of establishing, growing and nurturing the business. It is a testament to the founder overcoming enormous obstacles. It is also a time to plan for reinvention (because maturity is only one step away from obscurity), constantly redefining what business you are in. This critical activity requires you to define your business according to the needs of your customer, not according to the product or service you sell. By doing so, you expand the boundaries of your market and open up possibilities for future growth.

Rather than add layers between you and the customer plan to create/build individual profit centres/business units, each one focused on a different product group or market segment and led by someone with a strong entrepreneurial mindset.

Planning pointer: To stay successful, you have to keep the entrepreneurial spirit alive.

Some final thoughts

  • At what point in the business life cycle is your business?
  • If it’s in the starry eyed enthusiasm stage; cash flow is the lifeline
  • What systems and procedures are in place?
  • Can the business be developed as a “turn-key” business?
  • Does the business owner have the courage/strength/capabilities to appoint a GM at the appropriate time?




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