What’s different about a good “business plan”?The most important thing is not to passionately talk about your dreams…

As mentioned above, I have been involved in business planning in various capacities. I learned something from that experience. it is,The most important thing in a business plan is “setting the issues”. In other words, it is no exaggeration to say that a successful business plan is all about setting the issues.

Of course, “1. Business purpose” and “2. Business plan” are also important. In the first place, it will not be a good idea to have a “business purpose” that does not make stakeholders want to “be part of making that dream come true.” If you can’t convince them in your “business plan” that this is an appropriate business plan, it’s unlikely that it will be approved.

If your business purpose and business plan don’t reach a passing grade, you won’t even be able to get to the starting point in the first place, so the importance of these is a major premise.

But think about it. In fact, the “great idea” you come up with is often someone else at another company who came up with it at the same time. The iPod is one of Apple’s groundbreaking innovations, but the concept of a device that lets you carry your music with you is something that Sony also had in mind.

However, it is impossible to completely predict the future of any existing business, let alone a new business.

That’s why,I would like to check how likely this business plan is.It is.

In order to ultimately increase profits, what kind of hypotheses should we formulate that are currently unknown, and what challenges should we take on? What uncertainties are likely to become obstacles in the process of tackling this challenge?

Of course, you need money to take on the challenge. Is this dream-like business plan worth investing your precious money in? Is it worth working together to pool our knowledge and work together to make this a reality? Stakeholders want to confirm this through the business plan.

That’s the “point of contention”.The issue is the problem that the project manager (drafter) is trying to solve.. No stakeholder will ever give the OK to a business manager who is unable to establish issues.

For example, the following four points are commonly discussed when starting a new business.

1. client:Are there as many customers as we expect?
2. customer value:Can our services and products provide the value that customers expect?
3. Consideration:Will the customer pay the price we expect?
4. operation:Can we achieve operations that generate the profits we expect?

If you can achieve these 1 to 4, you will be able to accelerate your new business. Which of these are highly probable, and which are still unknown? That “thing we don’t know yet” is the point of contention.

In other words, issues are the issues that need to be solved in order to achieve business objectives.. How do you resolve areas in your business plan that have low probability? This hypothesis will be presented in the business plan.

The points at issue can be seen by “decomposing” them.

The trick to setting a good point is to “break down” the point.. As we break down the points at issue, we can come up with a hypothesis.

For example, let’s say there is a company A that wants to “expand its profits.” Although customer satisfaction with Company A’s products is reasonably high, the company is concerned that it will not be able to make sufficient investments in future product development unless it further improves its profits.

In this case, what kind of discussion should I set to increase profits?

This is where “disassembly” begins. As an example, let’s break down the points at issue as shown in the diagram below.

First, let’s break down the major issue: “Company A wants to expand its profits.”

Since the resolution is low in the large structure of “Company A,” we have broken down the organization into three parts: “Business Departments,” “Headquarters Departments,” and “Indirect Departments.”

Let’s say we belong to a business department. What measures can you take to increase the profits of your business division? Here again, we will further factorize the issues into factors such as “sales,” “marketing,” “incentives as part of personnel measures,” and “organization,” so that we can increase the resolution and understand the points at issue.

If you belong to the “sales” section of a business department, you can further break this down into “direct sales” and “agency”. If “direct sales” has more room for sales expansion, it seems possible to identify important points by utilizing quantitative (data) and qualitative (interviews, etc.) methods.

As a result of breaking down the elements in this way, let’s say you realize that the sales growth rate varies greatly depending on the sales team. If Sales Department B had the best performance, then by raising the performance of other departments to the same level as Department B, it would be possible to increase overall sales.

What do you think. We were able to break down the major issue, “Company A wants to increase profits,” into the intermediate issue, “We want to improve the performance of other departments to match the sales department B, which is performing well.”

In this way, even if you just say “I want to increase revenue,” you don’t know what action to take, but by breaking it down and increasing the resolution, you can get a much better feel for it, and you can imagine specific actions. It should now look like this.

Deriving the next point from the hypothesis

Let’s break it down further.

Let’s say you compare sales steps between sales teams and find that there is a big difference in “presentation rate” and “closing rate.”

This is the “hypothesis” that may be the cause of the difference in performance between the B division and other divisions.A hypothesis is the most probable fact at a given point in time regarding an “issue”..

This “hypothesis” becomes the next “point of discussion.”

Why is there a difference between these two steps? How can other divisions raise their grades to the same level as Division B? (Next point of discussion). What is the hypothesis that can solve this issue? We repeat this process until we can translate it into concrete actions of the executive (in this case, the front-line employees), creating a tree of major issues → middle issues → minor issues. I’m going to make it.

The story you create in this way will become the “heart” of your business plan.

If the business manager can create a story like this, the person making the decision will feel at ease. And by telling this story with minor changes to the executor, you should be able to make them think, “I think I can do this.”

Setting the issue with “good taste”

Here, I would like to share with you some things to keep in mind when setting issues.

When I talk about how important it is to set the point, I sometimes come across the following two types of bad patterns.

• “Dark night gun” type: The type that relies on guesswork, like firing a gun into the pitch darkness. In rare cases, there are cases where there are genius skin types that work out by chance, but the reproducibility is not high. As soon as that genius disappears, the organization falls into a predicament.
• “CT scan” type: A type that creates a detailed discussion tree. People who are familiar with the word MECE (Mutually Exclusive Collectively Exhaustive) are more likely to want to create every detail in detail (see the image below).

The key to setting issues is to have a good answer. In other words, only the parts that need to be broken down are broken down to the point where they can be translated into on-site actions. In the previous example, we divided the main points of discussion into three parts: “Business Department,” “Head Office,” and “Indirect Department,” but only “Business Department” was further broken down.

In this way, focusing on only the essential parts and breaking them down is not only more time efficient when creating a business plan, but also easier for the approving company and executors to understand the plan. It becomes easier.

Up to this point, you have been able to understand the most important point in creating a successful business plan: setting issues. Next time, let’s think about how to link the points identified here to numerical targets.

*This article was first published on July 2, 2021.

Ryuichiro Nakao: Representative Director and President of Nakao Management Institute. Completed the Graduate School of Engineering, Osaka University in 1989. Joined Recruit. He assumed his current position in 2019 after serving as executive officer (in charge of business development) of Recruit Sumai Company, president of Recruit Technologies, and deputy director of Recruit Works Research Institute. He is also an outside director of Tabikobo Co., Ltd., an outside director of LIFULL Co., Ltd., a part-time auditor of LiNKX Co., Ltd., and a fellow at Hakuhodo DY Holdings Co., Ltd. His new book is “OJT management that develops employees who can think for themselves.”