Business planning can strike fear into many Small Business Owners. However, it doesn’t need to be a daunting task for you to shy away from. In fact, it should enthuse and inspire you.
Now presents a good time to reset the clock. Set your targets and go again. With a fresh start and renewed optimism.
Sadly, when most people think about business planning, they are either provided with a 15 page Business Plan Template to complete or told to update their last-edited Business Plan. You really don’t need to do that.
Into The Everyday
To put this into context, I have a few personal New Year’s Resolutions this year. Just imagine if I was told I needed to update my house address, bank account information, next of kin details, reporting on last year, before being allowed to list this year’s sporting targets.
I’ve now lost all enthusiasm. And yet before I was excited!
I really just wanted to list this year’s bucket list and contemplate what I need to do to achieve them.
And that’s the crux of what you need to do. What you need is – a simplified version of a – Strategic Plan.
Considering and writing down your business targets is surely of benefit.
It creates direction and provides a means to keep you focused. It allows you to understand how to stretch your resources and calculate whether you have enough resources to meet your goals. Resources would include money, people, assets, and time.
Here is an example.
One of my personal objectives in 2020 is to complete a triathlon (a multi-discipline event consisting of swimming, cycling, and running). Three sports I enjoy, currently individually.
My free time is squeezed to say the least. I can usually set aside two hours for myself each week.
However, I know I need to increase my swimming, cycling, and running training. So when a friend asks whether I want to take up badminton or archery this year, I should already know the answer.
This can be the same for you and managing your business.
Here is a scenario that brings it into context. Next door’s offices have come up for sale. They are selling for a fair price, and you think you could get a mortgage on them. They are bigger than you currently need and you weren’t actively looking to move offices. So, should you spend time and money investigating this opportunity further?
You already know the answer.
Was moving to bigger premises or owning your own office one of your objectives for the year? You’re now focussing your time and money on this year’s objectives and the direction you wish to take.
Business owners know opportunities such as this arise monthly. Wouldn’t it be great if you knew which opportunities to pursue and which to overlook, right now?
Being Accountable
The next stage of this process is to share your objectives with employees. This creates accountability on your plan and will improve company-wide decision making. Including making the best use of them as a resource.
A second New Year’s resolution for me is to have an alcohol free January (succeed Dry January). Ask yourself, ‘am I more likely to achieve this goal if I share it with others? Or more likely to achieve it if I simply wish it?’
The latter doesn’t exactly bring me to account should I fail to achieve this – very small – feat.
Declaring my Dry January target will also eliminate the possibility of my partner returning home from the weekly shop with a pack of beer. I have improved their decision making by declaring my intentions. And saved them money.
Here Is What You Can Do
So what are the steps to listing your targets or objectives?
You may already know how you want your business to develop this year. The plausible reasons will be to grow, free up your own time, be more sustainable, more competitive and even to achieve peace of mind.
Consider where you are now. This is the “As Is”. What is your current:
- Turnover
- Profit
- Number of Services / Products offered
- Number of Clients
- Number of Employees
- Quality of Clients or Employees
- Geographical Location(s) (in terms of sales, this was a question I was asked the other day)
- Office Location / Size
- Reputation
- Company Culture
Now, where do you want to be? Essentially, run through any of the above. Which ones do you want to grow, improve, consolidate and diversify? This is now your list of objectives.
For each of these headings or sentences, write out Why? Why do you want to increase turnover, or number of customers,? What will this achieve? Is achieving this new objective actually the best way of achieving the overall reason why?
Remember, you will want to publicly declare your reasons to your team, and you can bet they will be asking you why!
And now, targets. You can hopefully set some targets for each of the objectives. Some will obviously be more tangible than others. More formally, what metrics matter and how will you track them.
And finally, How! This becomes your plan. This will focus on the allocation or acquiring of resources, to achieve the “Where we want to be” by hitting your targets.
This is what I highly recommend:
- YOU map out ‘what the company needs to have achieved’ at each monthly interval.
- YOU implement a process to measure and report on the actuals.
- YOU dedicate time to analysing the actuals against the targets.
- YOU adjust what you are doing if you are not hitting your targets. If the plan isn’t working, then you need to adjust it.
In With The New
The textbooks will tell you this newly created or updated Strategic Plan should outline your one year, three year, and five year objectives but that isn’t appropriate for the majority of SME’s I worked with. Stick with one year, this upcoming year. Measure your achievement of the objectives against the targets on a monthly basis (NOT quarterly).
Revisit them once you have achieved them.
Update the Strategic Plan again next year. This is so you don’t become overawed.
And does it matter if I don’t achieve Dry January or complete that triathlon this year? Not really. However, by aiming for it I’ll probably be fitter come March than I would have by not consciously attempting them.
As Norman Vincent Peale said, “Shoot for the moon. Even if you miss, you’ll land among the stars.”
Good luck with your efforts. Let me know how you are getting on.
The Finance Director does not need to be a full-time overhead to be committed and make a difference to your business. I help simplify financial performance, planning and strategic positioning for businesses who just want their world to be uncomplicated and thrive.
