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While common wisdom might suggest that a business plan is “de rigueur”—required by fashion—for any small business, there are HR consultants, and other experts, who would disagree. Some disagree vehemently.
“Business plans for consultants are just dumb,” says Alan Weiss, president of Summit Consulting Group, Inc. “Consultants, especially those steeped in HR, need marketing plans, because they generally know nothing about marketing and this is the marketing business,” he adds. These plans should contain three elements:
What value does the consultancy provide the client?
Who can write a check for it?
How do you reach that person and enable that person to reach you?
Weiss is not the only one who questions the value of business plans. Research by the Villanova School of Business calls into question whether these plans hold value for small, entrepreneurial businesses.
Professor Scott Newbert of the Villanova School of Business published a 2007 study that says that business plans are overrated. Despite conventional wisdom favoring the producing of a business plan, the study says business plans were either irrelevant to future success or a detraction from starting a new business; potential entrepreneurs will start writing their business plans and succumb to paralysis by analysis and never get the business operating, Newbert says.
However, there is a difference between the planning process and a business plan that exists as a formal document, some consultants say.
A business plan that is set as a document is really needed only if a consultant is looking for funding, partners or key employees, says Julie Lenzer Kirk, a consultant with Path Forward International of Damascus, Md., and author of The ParentPreneurEdge (John Wiley & Sons, 2007). Consultants who are not seeking money, partners or key employees do not need to sit down and write a 30-page plan, she says. However, consultants do need to go through the business planning process, she says. “The results of the planning process can be on a white board (or a) flip chart, or even scattered in your head, but the steps you take are critical to business growth,” she adds.
Power in Simplicity
While opinions vary, those who support business plans have some important suggestions to share on how to keep the process simple while maximizing the value of the business planning exercise.
Kenneth McGhee, consultant and author of Teamwork – Moving Beyond Teambuilding Exercises (Outskirts Press, 2007), has a four-part business plan for his consultancy that is fairly simple. It reads: “being customer service friendly, doing the best you can with technology to make more options available online for customers and employees, making sure you are in compliance with local, state and federal regulations, and looking at best practices to see if they are a good fit with your organization.”
A more traditional approach is proposed by Robbie Kellman Baxter of Peninsula Strategies of Menlo Park, Calif. HR consultants need business plans just like any other business owner, particularly in a declining economy, she says. “In a market like the current one, you just can’t put out your shingle and wait for the business to come,” she says. “Savvy consultants in all specialties are developing sophisticated marketing programs (and) building relationships with colleagues, potential referral sources and clients,” she says. “They need to know who their audience is, what their value proposition is, and how they are going to grow their business,” she adds.
By having a business plans, consultants can move to a higher level of performance and perception in the minds of clients and prospects, Baxter says. “Consultants that don’t plan run the risk of being perceived as contractors, doing whatever is needed, rather than as specialist/advisors, able to really impact a company’s direction. Or worse, they run the risk of not getting any business,” she says. Lisa Aldisert, a principle in the business growth consultancy Pharos Alliance, Inc. of New York, says business plans provide HR consultants with value. “A business plan is a blueprint that helps an HR consultancy know where its business is going and how to do it,” she says. “It doesn’t need to be a large, burdensome document,” she notes. “In fact, we help our clients create one-page plans to keep things simple and accessible.”
How To Do It If You Do It
HR consultants who believe a business plan might provide valuable focus to the consultancy can follow some simple strategies, Aldisert says. Such consultants should ensure that the plan covers five key areas: client service, finance, marketing, operations and sales.
Even if a HR consultant creates a plan that sits on a shelf, there is value, Aldisert asserts. The process helps the consultant organize his or her thoughts so that there is a strategic focus to the business, she says.
Lisa Nirell, chief energy officer of EnergizeGrowth, LLC, of Sunriver, Org., agrees. “As a consultant with 24 years of selling, planning and marketing experience, I have seen very few consulting firms thrive without a strategic plan,” she says. Even in one-person operations, a strategic plan should be in place, she adds. Like Aldisert, Nirell says that effective plans do not need to be long or overly complex. They must, though, include some essential elements:
A three-to-five year vision of the future.
A one-to-three year description of the firm’s mission.
A list of from two to four “important areas” the company needs to expand into or improve.
The firm’s core values.
A list of from two or three goals the firm needs to achieve with 12 months.
A description of the branding, messaging and marketing strategies needed to attain those goals, as well as the action steps and resources needed.
An information technology, HR consulting client used the plan model; within three years business increased from $350,000 in annual revenues to $1.8 million, Nirell says. “As Proverbs says, ‘where there is no vision, the people perish.’ So goes your firm, no matter what industry or size,” she states.
“Based on our findings, it seems that what nascent entrepreneurs do may be more important than who they are and in what product markets they intend to serve in their quest for legitimacy,” Newbert says. The study suggests that new entrepreneurs willing to engage in behaviors aimed at creating a positive impression of a legitimate organization through activities such as starting marketing or promotional efforts, developing projected financial statements, opening a bank account exclusively for the new business, and/or listing the new business in the phone book might be more likely to convince potential customers, employees and financiers, that their organizations are legitimate exchange partners.
Lin Grensing-Pophal, SPHR, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues. She is the author of Human Resource Essentials: Your Guide to Starting and Running the HR Function (SHRM, 2002).
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