A Tale of Two Business Strategies

To plan or not to plan? That is often a question business owners ask themselves, and while they know the "correct" answer is that planning is important to the success of a business, many female entrepreneurs admit they're more likely to go by gut instinct than deliberate, methodical planning. Who's more likely to succeed: the passionate, seat-of-the-pants type or the careful planner?

"When researching highly successful women, I was surprised by the number that did not have five-year plans--or two-year plans, or 10-year plans," reveals Sally Helgesen, author of the seminal book on female management, The Female Advantage, as well as Thriving in 24/7: Six Strategies for Taming the New World of Work.

Helgesen quotes Margaret Thatcher, who demonstrated a classic seat-of-the-pants approach when she said, "I never had a plan. I just took opportunities that presented themselves to me as I went along."

According to Helgesen, "The passionate entrepreneur starts out with a strong idea, but doesn't have a set plan for execution. She adapts and makes changes as she goes along, seizing opportunities and letting them shape her decisions." In contrast, she says the planner starts off with a detailed plan for execution and is far less likely to alter it in response to circumstances.

A seat-of-the-pants entrepreneur, explains Helgesen, has great faith in her own instincts, listens closely to her gut, then follows that feeling, while a planner may be less confident about her intuitive powers and feel more comfortable relying on a plan.

Terri E. McNally, 50, president of Chicago-based Global Capital Ltd., admits she is more of a planner. Her $28 million equipment leasing and financing business has operated from a business plan since the start--that plan is updated annually and referred to often as a guideline for running the company.

Planning is an important part of both McNally's professional and personal life--something she learned during her years of employment in a corporate setting. "I have no choice but to stay as organized as possible," she says, citing running her business, raising four children on her own, sitting on several boards and her outside activities as reason enough to have a plan.

"Personally, seat-of-the-pants is a little scary to me," acknowledges McNally, who believes that "all hell would break loose" if she were to deviate too far from her plan, which in turn would result in losing business, time and money. She also understands, however, that even with planning, things change. "We are flexible enough and leave time for opportunities that come up."

Beth Shaw is McNally's polar opposite. "I have been in business since 1994 and have never had a formal business plan," says Shaw, 39, founder and president of YogaFit, Inc. in Redondo Beach, California. Shaw runs her $4 million yoga education and products company completely by the seat of her pants. "I have ideas, goals and some plans, of course, but overall, I think business is a living, breathing, organic thing with a life of its own that an owner cannot really control."

Despite the lack of a detailed written business plan, Shaw does point out YogaFit has an annual financial goal: to cover expenses and achieve at least 10 to 15 percent growth on gross sales from the previous year.

Running a business without a plan doesn't seem unusual to Shaw. "You never know what the universe has in store for your business and what can come up, so it's most important to be flexible when running a business. When you are run by a plan, you become rigid. Rigidity is not a positive trait for an entrepreneur."

Balancing Act
While a born planner may never be able to become spontaneous and vice versa, Christine Kloser, author of Inspiration to Realization: Real Women Reveal Proven Strategies for Personal, Business, Financial and Spiritual Fulfillment, says the key is to strike a balance. "It's [difficult] to go against your innate way of operating," Kloser says. "The planner who tries to throw caution to the wind will be so uncomfortable without a plan that she'll be unproductive and nervous and feel the strain in her business. The [instinct-driven] entrepreneur who shifts her focus to planning will feel boxed in and restricted, and her creativity will recede along with her bottom line."

Helgesen agrees. Trying to change your nature "will undercut the uniqueness of what you offer. The best entrepreneurial ventures are an expression of an individual's uniqueness," she says, adding that it's important to know your own strengths and weaknesses and find employees or associates who complement you.

Shaw points to her CFO as the key person within her company who makes plans regarding financial matters for the business. "It's important to have someone high up in your company who's capable of creating plans," Shaw advises. "You need the safety net of a good staff to implement creative ideas and make them a reality. Let your people provide the balance by creating a good team."

Being a planner doesn't mean you're devoid of creativity or passion, of course. Mie-Yun Lee, the 39-year-old founder or BuyerZone who has recently transferred ownership of her thriving company to Reed Business Information, considers herself a passion-driven planner. She admits to starting her online marketplace for buyers and sellers of business products and services in 1992 entirely though passion.

"We didn't have enough people or time to plan," she confesses. "Fast forward, and I'd have to say the passion is still there, but it is reasoned passion." Lee believes that having a plan is especially important for staff to use their time efficiently.

Lee's company has two business plans--the original plan with a content-oriented business model written in 1992, as well as a 1999 version written for the company's VC fundraising efforts where the business model morphed into an online marketplace.

"The last time I looked at either business plan was May 1999, after we raised our first round of funding," says Lee. "But although I may not look at the print version, I am always thinking about the strategic direction of the company. In lieu of constantly referring to a business plan to keep me honest, we have a board of directors that helps keep our focus on the big picture."

Running a business with long-term planning is essential, in Sepideh S. Asefnia's opinion. "I am responsible for the livelihood of my employees, and I take that responsibility very seriously," says the fortysomething president of SEPI Engineering Group, a $3.5 million firm that provides transportation engineering and planning services in Raleigh, North Carolina, and the Southeast. Still, Asefnia makes many business decisions based solely on her gut instincts.

Asefnia's planning side manifests when she's adding services or divisions, targeting new clients and prospects, or expanding to new cities or states. "Everyday decisions--or decisions that are inexpensive to correct--can be made on a more seat-of-your-pants approach. Not everything can be planned," she explains.

To illustrate the need for gut instinct, Asefnia recalls meeting a highly qualified person in the environmental engineering field in 2005. "I had not planned on adding that specific service in 2005, but I hired the employee, and she has done an outstanding job for us. We now have three employees in our environmental division." While adding that division was in Asefnia's long-term plans, not her short-term vision, she proved that acting on instinct paid off for her company.

"If a planner tries too hard to go with the flow, and her intuitive powers are not well developed, she might make mistakes," says Helgesen. "It would be smart for her to check her impulses with a few trusted people who could serve as a sounding board." Helgesen believes, however, that planning is good discipline for "go-with-the-flow types," but they should avoid adhering too rigidly to their plan or risk undercutting their instincts.

Asefnia has a business plan that was written four years ago, when she started her business in May 2001. "I used my plan to get to where we are today but have not updated it yet," she says. She has scheduled a strategic planning session to set updated long- and short-term goals and hopes to repeat the process every year.

Lee believes passion got her to start her business, but planning has made it successful. "Passion gives you the big ideas that can help grow your company in large steps. Planning makes sure that the seat-of-the-pants ideas actually get traction and [lead to] success." Lee cites her balanced approach as the recipe for the growth of her multimillion-dollar dotcom business, which managed to survive the internet bust.

"Balance is necessary in all business decisions," says Asefnia. "To find that balance, look at your past experiences and gauge the results of your actions. Did you lose an opportunity by too much planning, or did you not think through all the ramifications of the decision because you are too passionate? Try to learn and move forward from there."

Next Step
If you are clearly one type of entrepreneur or the other, Kloser recommends getting exposed to a variety of entrepreneurs by seeking environments where you can interact, such as networking organizations and professional associations. "Keep your eyes open to attract people who possess talents, skills and viewpoints that are different from yours. Once you have solid relationships with businesswomen who are strong in the areas you want to improve, you have a never-ending resource of wisdom to access when you need it."

In Asefnia's opinion, no business owner can be entirely one type of entrepreneur. "A business owner has to plan and have specific goals but also be flexible, adaptable, able to make decisions based on changing times and information, then go with it."

Admits Lee, "I don't know if I would have started a business if I had actually planned and knew how many 20-hour days I'd need to spend to get my business off the ground. On the other hand, passion alone could have potentially driven the business into the ground."

Tips for Passionates and Planners
For Passionates:
From Mie-Yun Lee, founder of BuyerZone.com:

1. Think before you blurt. Sit on your idea for a few days, even a few months, before mobilizing staff around your efforts.
2. Don't keep switching priorities. Idea-of-the day management can be very hard on staff members.
3. Focus your passion. Do the planning necessary to achieve your goals.

From Sally Helgesen, author of Thriving in 24/7

1. Be prepared for opportunities when they present themselves.
2. Always have a sounding board against which to test your gut instincts.
3. Go for broke, but be prepared to fail and learn from your mistakes.

For Planners:
From Christine Kloser, author of Inspiration to Realization

1. Do what you do best. Once your plan is written, continue to review it and revise it as necessary to reflect the evolution of your business.
2. Take time away from the numbers and the plan to remember how you're serving your customers and the difference you're making in their lives.
3. Bring in a partner or create a strategic alliance with someone who is passionate about your business. Together, you'll balance each other out and make a great team.

From Sepideh S. Asefnia, president of Sepi Engineering Group

1. Know yourself and be true to who you are.
2. Know your market.
3. Be creative. Don't be afraid to take calculated risks.

Also Check Out these Good Reads
For Passionates:
Minding Her Own Business: The Self-Employed Woman's Guide to Taxes & Recordkeeping by Jan Zobel
For anyone who doesn't cite accounting as a strong point (in other words, many entrepreneurs). Zobel's no-nonsense style gets right to business in a language that even non-CPAs can understand.

Clearing the Hurdles: Women Building High-Growth Businesses by Candida Brush, Nancy M. Carter, Elizabeth Gatewood, Patricia G. Greene and Myra M. Hart
Describes creative financing options and explains the VC process in detail, presenting research on why it's still an enormous challenge for women business owners to land the money they need to take their businesses to the next level.

For Planners:
From Burned Out to Fired Up: A Woman's Guide to Rekindling the Passion and Meaning in Work and Life by Leslie Godwin, MFCC
Reveals four myths that lead to burnout, then provides exercises to rethink your direction.

Inspiration to Realization: Real Women Reveal Proven Strategies for Personal, Business, Financial and Spiritual Fulfillment by Christine Kloser
Advice given by more than 40 female entrepreneurs and experts, providing a more holistic, balanced approach to strategic planning.

Thriving in 24/7: Six Strategies for Taming the New World of Work by Sally Helgesen
How not to merely survive, but to thrive in business, where technology and the blurring of boundaries between work and home have created new challenges, causing us to forfeit "ways of being that are fundamental to us as humans."