Nobody goes into business planning to fail. Unfortunately, they may end up there because they fail to plan. A good plan isn’t complicated. In fact, simple works best. But, if done effectively, it will keep you focused on priorities, so you stay on track and actually accomplish more.
6 Tips To Improve Planning
Action vs. Business Plan. While a business plan has its purposes, bank financing among them, a concise action-oriented plan will serve most business owner’s needs. It’s for your use – your road map or blueprint to success.
Keep it simple and short (5-7 pages at most). Don’t strive for perfection. Simply lay out your goals, the actions (tasks) you need to do, and time-frames for completion. Don’t forget to incorporate ownership for critical tasks and measurements to evaluate success. When it comes to planning, consider the words of General George Patton, ‘A good plan violently executed today is far and away better than a perfect plan tomorrow.’ Sometimes simple is sophisticated.
Plan Annually and Review Quarterly. It’s best to start a year with an annual plan, broken down into four quarters. But don’t let your plan collect dust on the shelf. Review it monthly or at least quarterly so you can make adjustments. Assumptions you made earlier may no longer be valid. Competitors and suppliers make adjustments. Economic conditions change. Staff and customers’ needs may change. Your plans need to reflect this.
Look Back Before You Plan Ahead. Know where you are today before you start planning where you want to go. Look at your financials and key numbers. How do they compare against your last year goals and your industry? Then take a few minutes to write down your accomplishments (big and small) for the previous twelve months or last quarter. It’s important that you recognize the things you did well. Finally, make a short list of the things you didn’t accomplish and ask yourself what held you back and what lessons did you learn. Don’t dwell on these, but apply lessons learned as you move forward.
Chunk, Chunk, Chunk. Big goals are nothing more than a series of much smaller ones. If a goal you want appears too big to conquer or takes a long time to accomplish, chunk it up into smaller ones over shorter time periods.
For example, if a business wants to increase team productivity by a certain percent this year, they will likely have a series of tasks such as developing and communicating productivity goals, document and streamline delivery procedures, create a team incentive, train the team on new methods, hold monthly team meetings, etc. These smaller ‘tasks’ are much easier to handle and together will move them toward the bigger goal. Remember, ‘By the yard, goals are hard; but by the inch, they’re a cinch’.
Think Big. It pays to think big when setting goals. The old saying ‘shoot for the moon, if you fall a little short, you’ll land among the stars’ explains why. Often we set safe goals because we fear failure or simply can’t figure out how we can get there. Sure it’s safe to set a 5% growth or improvement goal — but what if you chose instead a 30% improvement and asked for advice on how. Employees, alliances, suppliers, other business owners and yes a business coach are all great sources for new ideas, but you need to ask. What if you fall a little short and only grow 25%? You are still better off than you would have been with a 5% improvement! So think big, believe you can and ask for help if needed.
Measure, Measure, Measure. Would you ever play a round of golf and not keep score? Not likely, because you want to know if you improved or beat your previous best. The same is true in business. If we don’t link measurements to our goals, we have no way to evaluate how we are doing. What we measure, we can improve.
So what are some of the things you should track and measure? Revenue, gross profit margins, fixed expenses and net profit are obvious and most owners track these. But depending on your goals, industry, and type of business, the others you track will vary. Here are a few examples of some common Key Performance Indicators: number of leads, sales conversion rate, average sale, A/R days, on-time delivery, quality percentage, customer and employee satisfaction ratings and labor as a percent of sales.
So now you have the recipe. Start taking the steps you need to plan and achieve the success you want. For more help with planning, check out my Ultimate Goals and Action Plan Guide.
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