Have You Ever Built a Tree House?

I remember when we were kids how my brother and I and our friends from the neighborhood would decide, every once in a while, to build a tree house. I think we would all start with this vision of something that looked like a miniature version of a real house but I don’t ever recall a discussion about what we would build beyond ‘a tree house’.

In our neighborhood, there was a junk yard down the hill on the other side of the wall at the end of our street. We were young, we had energy and we all had access to nails, hammers and even saws. We never built anything approximating a tree house. Why?

Would you build a real home without a blueprint? Fortunately, for all of us who grew up in my neighborhood the answer is no because, even if we were still fool hearty enough to try, zoning laws would not allow it. You can have the most detailed idea of what you want to build but you are required to have professionally drawn up blue prints in order to get the permits to build it.

For those of you who own a business and a home, it is arguable that your business is your most valuable asset. Without your business, it is unlikely that you will be able to afford to maintain your home. So, if your home requires a blueprint, what about your business?

The foundation of the U.S. economy is small business. Pretty much anyone with an idea or a passion can create the opportunity to own their own business. And, while government regulation does not require that entrepreneurs have a business plan, the realities of attracting capital do necessitate a business plan (your blue print). Why?

Capital sources and financiers want to know if you are building on solid ground. They want to know the prospects for actually making money by investing in your venture. They want to know:

  • What are you building?
  • Why is it different or needed?
  • How much money do you need?
  • How will you use the money?
  • How much money will they get back?
  • What are the risks?
  • When will they get their return on investment?

But if you are not seeking outside capital, do you still need a business plan?

When we built our tree houses we never sought outside capital. We knew we wanted to build a tree house and we just went ahead and built it. I think the best we ever did was to build a platform that might have supported the weight of two of us – until the single limb that was supporting the platform gave way – and Tommy Flemming’s arm got broken in the fall.

We were kids building tree houses, our parents supported us and Tommy’s arm healed. We could afford to build without a plan. Can you?

In order to develop an executable plan, follow these 5 simple steps which are easily remembered as:

  • Past - Where have I been?
  • Present - Where am I now?
  • Future - Where am I going?
  • Strategy - How am I going to get there?
  • Time - When will I get there?

Let’s take a quick look at each one:

Where Have I Been?

When we commence a new engagement, the first thing we do is analyze up to three years of historical financials. Why? Because we want to determine where any inefficiencies in productivity exist of course but, equally important, we want to ensure that the goals of the company are realistic. Building a successful company does not happen overnight. It is a process. And the process begins with a clear identification of realistic goals.

Where Am I Now?

Perhaps you’ve heard of a SWOT analysis? A SWOT analysis is an appraisal of your current Strengths, Weaknesses, Opportunities and Threats. Like the first step in developing a plan, it provides a reality check. It helps you to determine the resources (capital, personnel, equipment, expertise, etc.) you have available to achieve your goals.

Where Am I Going?

Now, having a good sense of where you are and what got you here, it is possible to set aggressive but realistic goals. When you set your goals, it is critical that, beyond being realistic, your goals are clear and quantifiable. (For more on this, download our FREE PIP Checklist.) It is only with clear and quantifiable goals that you can hold your team accountable to executing your vision and inspire them to perform at their best.

How Am I Going to Get There?

Like your goals, it is critical that your strategy be clear and realistic. Again, in the first two steps, you have identified the resources you have available to achieve your goals. Now it is essential to properly align these resources, set specific milestones and effectively monitor performance. The greatest strategy in the world is of little value if it is not effectively executed so it is critical to align your resources around an executable strategy. (Here again, our FREE PIP Checklist might help).

When Am I Going to Get There?

Adding a time element to your plan is absolutely crucial to execution. Just as common sense dictates that the foundation for a house must be built before the framework can be erected, that the framework must be erected before the walls can be built, that the walls must be built before the paint can be applied, so should it be that common sense dictates that EVERY function within a strategy must be coordinated in order for the strategy to work. And the resource that ties every function together is time.

Without regard to any outside influence requiring it, EVERY company benefits from developing a documented strategy before taking action.

We hope these 5 simple steps of developing a plan will help you to get started!


Download our 7 Step PIP Checklist. It's FREE.
These 7 Steps provide the foundation for establishing your plan and, most importantly, profitably executing it.


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