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The Importance of Planning

by Sep 19, 2019Uncategorized0 comments

Where are you in your business ownership journey? Are you just starting out or have you plateaued in your growth? Are you looking to retire or exit? Regardless of where you are in your small business journey, having a regular habit of planning and reviewing that plan is critical. The reasons for having a plan or creating your first one should be obvious, it creates accountability, It keeps you on track, it forces you to evaluate or re-evaluate the situation and make changes before it is too late. Planning does not have to be complicated, it takes time, something to be scheduled, something that is best done with trusted advisors and mentors to avoid creating an echo chamber. A healthy sense of “why” and “so what”, are useful to ensure that you are focused on what is important.

There are 5 basic steps to designing your plan. It can begin as a one-page framework and be expanded as needed or as your business evolves.

Step 1 starts with defining your goals. The more specific the better, you might create short, mid and long-range goals but they should tie together. Too often people jump to tactics, without establishing the KPIs to determine the effectiveness of the actions identified. However, the next component in planning that is important is identifying and outlining what strategies you can use to reach your goals.

In Step 2 you might need to identify the multiple strategies to achieve your goals. That might be a broad goal for the overall business, like achieve $1M in sales and breaking down the multiple strategies, like a Marketing Strategy, a Delivery/fulfillment strategy and a financial strategy or it could be a very specific goal like add 10 new clients per month for a Marketing goal, and multiple strategies to implement to reach the identified goal.

Step 3 takes each strategy you identify and outlines the tactics or actions that will be implemented to reach that goal set forth in the strategy. Under each strategy you have identified, outline the tactics you will use to meet your goals. The tactics will yield specific action items and milestones. Tactics are Specific, Measurable, and Timely. You must be able to measure effectiveness of each tactic for example a tactic is not get 5 clients per month but it would be implement a call campaign to XX number of business per week and convert that into X number of client meetings per month with the goal of 5 new contracts, in this example you have a series measurements you can evaluate effectiveness. XX Calls = Y meetings = Z closes.

Step 4 is to identify what information and resources are needed. It is important to also identify what resources you need and what research is necessary in order to adequately plan and implement your strategies. How much dollars do you allocate, how much time, what employees are needed, what gaps in your knowledge exist, and do you need to learn it or find a trusted advisor.

Step 5 is the final step and one where you identify what is holding you back – Obstacles in your way and fears or risks you have achieving your goals. Identifying them helps you validate them and incorporate strategies or tactics that help you avoid them. For example, if it is a sales/marketing plan that requires cold calling and you have a fear of doing that, you might opt to hire a pro or overcome the fear and just do it.

All this planning can start out as a simple one-page exercise, we have a simple form that can help you frame that out and you can download that on our website.

Taking the time to regularly plan and critically look at your business helps to avoid “The Owners Trap”. The truth and challenge for small business owners is that most business owners are not free at all. Most are trapped by their business because they find that they are the choke point for all things in the business. This can be frustrating and hamper the growth of the business. It can also lower the value of the business and create situations where the business becomes unsellable. Some of the signs that you are in the owner’s trap…

  • Business slows or stops when you are away
  • Customers bypass your people and come to you when something goes wrong
  • Your revenue has plateaued.

This situation happens to many businesses, often after initial growth. Sometimes it happens slowly, and you are unaware of the enormity of the problem. Typically, it happens when the owner does all the selling and the company offers too many things without the talent coverage to deliver. This creates the situation where the owner is the only one capable of delivering the service or product and where the owner becomes the primary interface with the customer.

While this is admirable and as an owner you should “know” your business and customers, the difficulty becomes when the owner becomes the bottleneck and your employees cannot conduct business without your direct involvement. This might occur when pricing cannot be determined without direct involvement in every deal or delivery and fulfillment of the solutions require the skills of the owner. What really occurs in this situation is that the owner becomes the product and the business value is totally reliant on the owner as bottleneck, this lowers the value of the business and makes it unsellable.

The importance of planning is that it creates a roadmap and a check point to where you want to take your business and where it is. It helps you create the KPI’s (Key Performance Indicators) that you need to use to assess the effectiveness of the strategies and tactics that you put in place to enact your plan.

Once you have an overall strategy set, you will want to dig into the key operational plans. Again, the key is start simple, frame out the high level of the plan and ask if it is specific, measurable and with a time frame to accomplish your strategies. Minimally the plans should cover the following: Marketing, Operations and Financial planning.

Start today and commit to reviewing and evolving your plan, make it important, put regularly scheduled time on your calendar for developing and reviewing your plan. Finally, don’t go at it alone, seek out input, challenge assumptions, develop a network to get open and honest feedback from mentors and trusted advisors.