The end of the year is the time when business owners carefully reflect on successes and lessons learned (there are no failures), in order to effectively plan for the future. If you don’t know where you want to go, you can’t expect to ever get any where. So it’s imperative to plan your work, and then work your plan.
Just as businesses come in all shapes and sizes, there are a variety of tactics an entrepreneur can employ when creating or revising a plan. To share what the experts are doing, last week I posed the following question –
For entrepreneurs, planning is vital to ongoing business success.
What elements are crucial to your planning and how far do you project?
The response to this question was phenomenal! My sincere thanks to our amazing experts, who were willing to share their “secrets” this week. More than the plans themselves, I think you will be fascinated by the process the respondents take in developing their plans. Enjoy!
First I identify if the project is working towards my business goals. You always have to make sure you are moving forward with focus and direction. When I create a plan of action I start from the end point and move backwards. I look at where I want to end up and then identify the steps I need to get there. Most importantly I break down projects to their most simple steps. When starting out it is easy to become paralyzed by a project. But working on one step at a time is manageable.
Questions to ask:
1. How much money do I want to make?
2. How many hours / weeks do I want to work?
3. What products, at what prices, do I plan to sell?
4. To whom do I plan to sell them?
5. How do I plan to sell them?
I take the answers and determine my key metrics. Things that MUST happen for me to achieve my goals. For example, to reach my goals I must sell at least 12 Widgets at a price of $1,000 every month.
The end product is a single sheet of paper with key goals and deliverables for each month of the year. I hang that sheet in front of my computer, a constant reminder of where to place my focus.
As an entrepreneur – small business owner:
- Being flexible/nimble enough to take advantage of opportunities instantly. That might seem like an unplan – but opportunities happen these days quite quickly and the window of entry is usually a very small time frame. Have systems in place to be able to take advantage of this. Ex: Automation, the flexibility to hire another person if you should need to pull off whatever you want to do, the constant building & nurturing of your network (connections), etc.
- Building scalability into your business.
- Thinking globally, even on day one (obviously now the internet & technology makes this an easier area to pursue)
- Making sure all things support one another constantly. In other words, nothing you do is even hinting at taking away from another forward action you have taken or are making in another area of your business (ex: a marketing effort isn’t juxtaposing something new you started with your customer service strategy 3 months ago)
- Business plans are a thing of the past with entrepreneurs. Business maps are more used today – allowing you to quickly take another road, etc. Plan 2 -3 years out now, before it was a 5 year plan. Things change so quickly. Having a contingency set of plans as well – for global events like economic downturn – should be a part of any plan you do now (we have all learned).
When helping small business owners, or any organizational leader for that matter, I always advise them to start with a basic strategic plan before any business or marketing plan. This is how I created a strategic plan for my business. First I spelled out my vision. Then I developed a mission statement (different from the vision) which clearly states why the business exists and what it does (but not how). Next, I create a statement of values that will govern everything the business does. I’ve found that a careful review of those factors and influences that work to prevent mission accomplishment is the next step. After defining these basics, I can then create goals and objectives, all of which must be directly tied to the mission statement to ensure I’m not wasting resources and time on things that don’t really help the business. As I was starting the business, I reviewed and rewrote this plan every few months, but once a business is established I move to an annual review. The review should take a look at the basic elements, (vision, mission, values) but concentrate on goals and objectives; evaluating progress, completion, and setting new goals. Goals do not have to be completed in a year, but must remain relevant. I’ve used this model in many different organizations and it has always worked!
I’ve started and built five businesses in the last 30 years – database development, call center, printing, direct marketing, call center. Now in this sixth one I help others start and build businesses. I have clients throughout the U.S., Canada, UK, and Australasia. In my own businesses and in the businesses of hundreds of owners I’ve worked with, traditional planning is almost always a big mistake.
Most business planning is focused on developing an annual financial plan for a 3-5 year period, and then putting together a detailed plan for exactly how we will get there. The plan never works out the way it was forecast, and the plan turns out to be a waste of time.
The only kind of planning that works is what I call 2.1 Planning
1) Where am I? – a sane assessment of where we are as a company and how I’m doing as the leader.
2) Where do we want to end up? – crystal clarity about where this is all taking us and exactly when we want to be there.
2.1) The next few steps – we can plan with great clarity where we want to end up and when we want to be there, but attempting to define HOW we get there is where traditional planning falls apart. All we can see is the next few steps. The rest is fortune-telling.
To this end we developed a 2-Page Strategic Plan to replace the Business Plan (I recommend that you never do another one except when a bank is old-fashioned enough to ask for one). We run our entire business off this simple plan, and really off of the bottom of Page 2. It is dynamic and ever-changing in acknowledgment that life and business is fluid, and never gets less than nine months our or more than 12.
Business is a wandering stream and we constantly want to build a canal with concrete walls to hold it in. Planning simply needs to identify where we are, where we’re going and the next few steps. That’s all we get. The most successful business owners are constantly making mid-course correction, not building detailed plans on HOW to get somewhere.
I have an excellent advisor who helped through much of the initial startup planning. I now use MS Project to project 6 months – 1 year out in detailed, actionable goals and task breakdowns that keep everyone on the same page and accountable.
Planning is vital in my business as well as plenty of statistical tracking and calculations. It gives our business a roadmap of where we have been and where we are going. We project our numbers out for 3 years. We may tweak some things along the way, but we will feel 3 years is a long enough range to shoot towards.
When I first started my own business (as a freelance writer), I didn’t think much beyond making sure I had enough to pay for the next weeks food. As my business has grown, though, I’ve started looking ahead. While I will put together projections on a regular basis, typically looking about six months ahead, those reports aren’t what motivates me to keep growing my business. Rather, I set goals and treat them almost as if they are projections. If, for instance, I want to earn a certain amount in a month — whether or not it fits with my projections — I write it down and then start thinking about how I’m going to hit that number. Most of the time I can hit pretty close to such a goal, including a month or two when I decided I was going to double my income. With straight projections, though, I have a much harder time of continuing to grow my business.
The element crucial to planning is ensuring that there is a reasonable/practical execution plan. Many companies want to follow in the footsteps of others, implementing plans that are unrealistic. Ensure you’ve defined the steps/tactics necessary to achieve the goals/objectives in your plan. And, identify the internal – or external resources, budget and timeline necessary. Above all, be honest. If you truly believe it can’t be done – but you feel it’s critical to the success of your business – start breaking down the reasons why you can’t – and find ways around them.
Having recently started my business, I am making sure I take the time to plan accordingly. I have been spending a lot of time on the business plan, doing financials, where I am projecting out 5 years, as well as doing in-depth research on the target audience I want to market my business to. In addition, I made sure to file all the legal paperwork — LLC, trademarking, etc. I find it easier to follow business checklists online, in order to make sure I am not overlooking anything. This has been very helpful over the past few months.
The most important things are creating Income, Lifestyle, Wealth and Equity Goals. I then break them down to a first year , one to Three year scenario and then onward via a strategic plan. What does all this mean, define what you want and work backwards to get there. Most people create a goal but never the means to get there.
Alan Ginsberg, Business Coach, The Entrepreneur’s Source
1) Update your personal dream board
2) Update your ideal client profile
3) The One Page Business Plan(R) book and/or software.
4) Create three visions (1 year, your exit, somewhere in between) – describe your business from your standpoint. (features)
Then for 2011 : Mission – describe your business from the client’s standpoint (benefits); Action Plan – Objectives, strategies and Major tasks each with a “to do”
About every 6 months we make a point to take a step back and analyze how we are doing from the “10000 foot level” as they say, for each department of our company (this involves everyone, we’re a small operation). This usually gets broken down into sales/marketing, operations/customer service, and any internal issues. Goals are a big part of this. Each time we do one of these, have goals that were set in each of these areas, so we start by looking at the goals we set, if we achieved them, and if not, how close we came. Based on that framework we talk about the specific strategies or issues that contributed to our success/failure. Then, we set new, realistic goals, and update our strategies to aim for these goals, incorporating the things that worked for us in the past, and making adjustments to things we think have been a hinderance. This forward-looking strategic planning is usually laid out by our CEO, who also spends time checking out any new developments with our competitors, then we give feedback to round it out. Then we go and execute for 6 months, all aiming toward the goals we’ve set out. These overall goal setting and strategy sessions are huge for us all being on the same page as we execute over the next six months.
This process has some major benefits:
Tons of clarity for everyone involved. As a consulting company, we go through so many projects, clients, marketing ideas, etc. that sometimes the overall goals can get a little bit lost. We’re a fast-moving company so 6 months is a good duration for us, but we’ve seen it vary at other places.
Reviewing goals is huge. A lot of companies we’ve seen set goals and then go and work really hard, then set new goals, and so on. For us, looking back on what we set out to do and delving into where we are vs. where we aimed to be has helped us stay on course and grow faster.
This process creates so much buy in from all of our employees. Involving all the employees not only helps us form a better strategy, but helps get everyone on the same page and committed to success. The understanding of the big picture and ownership of the strategy makes a huge difference in morale, even for our temp. employees.
Say the word “planning” to an entrepreneur and chances are, she’ll roll her eyeballs at you. After all, didn’t we start our own businesses because we wanted to be spontaneous and free from drudgery? The thing is, planning doesn’t have to painful! One simple tactic we’ve implemented at Urban Martial Arts is to keep an event calendar that outlines all the events we plan to host or participate in each month. Each year, we decide whether or not to do the event again based on how well it met our goals the previous year. Here’s how it works.
We have 3 main categories of events that we do, each with a different goal:
- Marketing events: These events are designed to generate leads so we can connect with prospective students. They can be events hosted by others, such as street fairs at which we rent a booth. Or they can be events we host ourselves, such as free self-defense workshops.
- Revenue-generating events: These events — e.g. board-breaking workshops, glow-in-the-dark nunchuck seminars — are meant to create extra income for the school, while allowing our students to try out an aspect of martial arts they don’t get in their regular class.
- Student appreciation events: Not all our events are aimed at signing up more students or generating revenue. Throughout the year, we host free events — barbecues, parties — where our sole purpose is to show our students and their families how much we appreciate them!
You’ll have to adjust the event categories to suit your business, of course. But the key is to have a healthy mix of different types of events. That way you’re able to balance the various needs of your business: reaching new clients, generating more revenue, retaining your current clients.
Carmen Sognonvi (@umamartialarts), Owner and General Manager of Urban
My sincere gratitude to our 14 experts this week, who took time out of their busy schedules to contribute to this post. Openly sharing your expertise and experiences is a huge asset to this blog and the readership. I wish you all a wonderful week and hope to see you here again.
This week’s question is -
What’s on your business Christmas wish list?
Why should I join the discussion?
Because this online forum is a great place for us to exchange ideas, learn from each other and network. My goal is to unite successful women entrepreneurs to share our insights and solutions to the challenges we most commonly face in our businesses.
How do I get involved?
Every Monday I will post a new Question of the Week. This is a great opportunity for you to bring your expertise to the table. Using the NEW link below, please submit a one paragraph response by Saturday, and the following week I will share our community responses on my blog.
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I look forward to your response to this week’s question! If you have any questions you know where to find me. Have a great week!