December 2007

A RainToday.com recent webinar attendee asked via email:

Many mid-sized professional services firm have no business plan and I’ve had to use the marketing plan to “back into” a business plan or general direction for the year. I find this is the case more often than not. Do you see this as well? It’s almost impossible to get “deal makers” at all levels (CEO on down) to take the time, and more importantly, make the decision on building a business plan, which should then facilitate the marketing strategy.

Often times, the businesses don’t need a plan. That’s why they don’t have one. Why?

Strategy at professional services firms is different than strategy at other types of companies. At many firms, strategy boils down to a set of industries to target, services to offer, and geographies to serve.

Revenue projections are often based on arbitrary measures such as the leaders’/owners’ desire to make a certain amount of money, percent of delivery capacity (i.e. we have this many people who can bill this much, so we’ll make this much money), or picked-out-of-the-air percentage growth targets.

General direction for the year, depending on the firm’s stage of growth, often consists of strengthening quality of services delivered, improving operational efficiencies, adding the right amount of staff to match historical growth pace, perhaps offering new services, and here and there something more strategic like acquiring other business or entering new markets. (And, of course, most firms state the obligatory “we’re focusing on our people” strategy messages internally.)

Because these strategies don’t always change year to year, you often don’t see a firm with a written business plan per se. And if you do, it’s in a PowerPoint deck…a short one, and maybe an Excel spreadsheet with projected revenue and costs.

Thus, not having a business plan in a formal sense is neither bad nor good. What’s not good is when firms get lazy about trying to be better or more competitive, get lazy about delivering the value they say they deliver to the market, or aren’t serious about focusing on their people.

Business plans do become important if you’re looking to raise capital because you need investors. Without the need for capital (or the need to satisfy another stakeholder like a board of directors), many services firms don’t need formal business plans.

Regardless of whether a business plan exists, marketing can still be the impetus for something interesting or strategic to happen at the company.

Marketing can:

• Be the key to unlocking growth in particular industry segments.
• Radically change your overall ability to generate leads and win new business.
• Create new service packaging and pricing such that revenue, margin, and repeat business increase.
• Force the company to study its own messages and value propositions, thus creating a stronger shared understanding of the purpose and norms of the firm.
• Uncover service or industry segments that are stronger prospects for revenue and margin growth than others, and focus firm efforts on these strong opportunities.

In the end, it doesn’t matter much where the energy, passion, enthusiasm, and innovation come from, be it business strategy, marketing strategy, or individual team members. What’s important is that it comes from someplace.