BY MICHAEL CRUZ
A plan is like a map, and you don’t need a
map if you’re going somewhere you already
have been before or if you don’t care where
you are going. Business planning is not just
for new business owners. It helps everybody
set their sights on where they want to be.
Often when I ask people about their business
plan, they tell me they have one. When I
ask to see it they simply tap their head. Most
of us find that we plan better – and more
consistently – when we write it down. I used
to be able to keep everything together in my
head. I wrote it on that invisible piece of paper
in my brain. And it worked! I remembered
everything that I wrote there.
As I age, I have found that that invisible
piece of paper has turned into an Etch A
Sketch. I still write things on my Etch A
Sketch, but as I move around my head wobbles
and everything disappears! I believe that
all business planning must be done on paper.
You’ll absolutely need a beautifully written
plan if you’re seeking investment, and you’ll
probably need a written plan if you’re applying
for a business loan. Those events force us
to a perfunctory review of our business. The
real objective of a good plan is to set a vision
that looks at what you want your business to
be in 12, 24 or 36 months from now. Having
it in writing also allows you to share with
your staff, your coworkers and your family
exactly what needs to happen to bring business
success.
The typical obstacle to business planning
is the belief that it takes too much time. Or,
who needs that complex document that I’ll
never look at again. You can do this in a lot
less time than you probably believe.
A good business plan starts with a strong
mission statement and a vision of what success
looks like. The key point of this is to
determine why your business exists, what
your customers value.
The second key element is to define goals
for your business. These are measurable goals. They often involve specific revenue
targets, number of customers, new products
that you want to introduce or savings and
efficiencies you would like to pursue. The
key is, to make this absolutely documentable
and verifiable. I frequently work with clients
who downplay the growth rate that they can
achieve. They often throw roadblocks directly
into their own pathway.
It is important to de-clutter and to attack
issues that prevent you from achieving your
intended success. This is not to say that we
espouse Pollyanna behavior. But it does say
that we must focus on achieving all that we
are capable of. I worked with a business that
was experiencing rapid growth. Their growth
had been in high double digits for several
years. The owner of the business decided that
high growth was not sustainable and thus he
would expect only 35 percent growth that
year. My question was a simple “why”? After
some introspection he settled on 65 percent
growth. At the end of the year the growth rate
was closer to 70 percent. The key was to remove
the mental barrier he had constructed against himself.
There are other places to find ideas to
fuel your goals. Look at other players in your
industry. How do they measure their impact
on their customer base? Which of those do
you most admire? Which competitors do you
never want to be compared to? This begins
the frame the questions of how big you want
to be and what number of customers you
want to have.
Another key element – our third step – is
to perform a SWOT analysis. Many of you have
done this before, but it’s good to revisit frequently.
It stands for Strengths, Weaknesses,
Opportunities and Threats. The easiest way is
to fold a sheet of paper in four. Each quarter
of the page represents one of the key elements.
Strengths are obvious. Weaknesses
are not always as obvious.
Ask other people about their perception
of your company. From this you will glean
your strengths and your weaknesses. Opportunities
are those areas where you finish the
question “What if?” Threats are things that
you have no control over, but if they were to
occur would have a major impact on your
business. Threats typically include things like
new competitors, key employees leaving and
major customers defecting.
The SWOT analysis allows us to work from our strengths, improve our weaknesses,
pursue opportunities and mitigate threats.
Finally, the easy part. This is where we
look at our goals and assign, by quarter, key
activities that will help us achieve our goals.
This is not as much a task list, as a focus on
major activities. If for example, you plan on
introducing a new product in the third quarter,
that is key. Were not trying to figure out all
of the subtasks that lead up to a new product.
We simply want to make sure that
throughout the year we are focused on
what the proper timing is. If you have key
new employee positions you want to create,
again, we slot that in the appropriate
quarter.
The key to all of this is that it must fit
on one single 8.5 x 11 piece of paper. It
must be simple enough that you can tack
it up over your desk, you can fold it in
place of your daily planner, you can share
it easily with those whose help you need
to achieve your goals. Whatever your goal
a well-documented plan will help you get
there. Shouldn’t you spend a few hours to
put more money in your pocket?
Think of it as your roadmap to success.
Cruz is president of Lighthouse Advisors,
LLC, a business advisory service based in
Queensbury.
Photo Courtesy Lighthouse Advisors LLC