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Business Strategy / Brainstorm
Who needs a business plan?
March 14, 2016 | Joe Barrick
Do you create a business plan each year? When I ask this question of clients, I will regularly get a chuckle or roll of eyes before I get that reluctant, “yeah, I do.” The reason for the response is universally that the client DID it, and then promptly put it into a drawer. A few will proudly admit that they pull it out once a quarter (or sometimes more frequently) and review it, but very few can say they live their business plan (or their goals).
It’s that time of the year (beginning of the 4th Quarter) to work on your business plan for next year. Your business plan is probably the most important part of your business, but it has to be living and breathing, monitored and adjusted. And in its most basic format, it is easy to do.
Let’s say you told me you are going on vacation. The first question I would ask is “where?” I doubt you would say “well, I’m just going to get in the car and start driving.” What are the chances of you getting anywhere? You would not only be able to tell me where you’re going, but how you’ll get there, how long you’ll be gone, how much it will cost, how long it will take you to get there, what you’ll be taking along, who you are going with, etc., etc. In other words, you carefully plan your vacation.
So why is it you don’t just as carefully plan your business? A well crafted business plan designed to make you successful will also keep you on track, be your roadmap (or GPS), and relieve stress. But even a simple business plan will give you direction, and when used correctly provide so much more for your business. Learn more about The Business Brain Here…
The three basic rules to creating a business plan are:
- Start with the end in mind
- Work backwards
- Break it down into smaller pieces
Start with the end in mind – How much do you want to sell this year? I am not talking net profit at the moment, but gross sales. Make that decision (See Smart Goals blog article), and don’t be shy. Be realistic, but it’s no fun unless the number is high!
Work backwards – Small children go through a learning phase where they constantly ask “why?” You need to keep asking “How?” Starting with the end, that question will set the steps before. Each step should also have a “how” attached, and keep going until you get to the most basic “how.” This identifies your SWOT (strengths, weaknesses, opportunities, threats or challenges.) You may look at a “how” and think to yourself “but I don’t know how.” More on that in a paragraph…
Break it down into smaller chunks – Time plays a big part in a business plan. If everything has a deadline of December 31, you will not even look at it until December 1, then shake your head and say “no way!” So break the steps into shorter or smaller increments, with interim dates. $1 million in sales for the year is $250,000 per quarter, or $83,333 per month, or $3,846 per day (five day week). Less than $4,000 per day sounds a lot easier to achieve than $1,000,000! Working with each “how” above, set dates for accomplishment.
As you go through this exercise, you will discover what extra tools, knowledge, personnel, equipment, or whatever you need to achieve the goals in your business plan. Excellent! How are you going to make that happen? Is it something you can do or does it make sense to hire someone to do it? Something you can learn, or delegate for someone else to learn. These answers become part of your business plan as they are an integral step in staying on target.
A more robust business plan will certainly improve your business skills and bottom line, but if you at least get this far, you will see a difference.
The most important step in this exercise is to take this finished plan and place it somewhere to look at everyday. One of the best places to put the plan (besides hanging on the wall of your office) is to purchase a desk calendar, and transfer the “small chunks” to the calendar. You will be much more likely to accomplish something on your calendar than on a list somewhere.
Don’t let another year go by without a thorough plan!