It’s strange how we’ve all heard, about the 5 P’s – Prior Planning Prevents (Piss) Poor Performance.
Great in theory… rarely practiced.
If it’s so good for us why aren’t we doing it more?
Learned helplessness – that’s my answer.
I’ve seen so much time being invested in business plans by big business only to then see operationally, a rabble of activity that bears no resemblance to the actual plan.
So why would you bother?
We’re Small Business Owners, We’re Pragmatic
We know what needs to be done.
Let’s just do that!
OK… Stop reading and get on with it!
But First – 5 Questions
- Did you accomplish everything you wanted in business in the last financial year?
- Did you make as much as you wanted?
- Did you do that is less time than you anticipated?
- Are you in a position that you’ll build on that success?
- Can you do the same or better in less time this year and have the holidays you really want?
If not… read on!
1. Acknowledge Where You Are AND Where You’re Going
Take time out to remind yourself what it’s all about “What’s the Vision”. Then consider realistically where you are today. That 2nd point is critical, it gives you the contrast and identifies the gap to close. Determine what you plan to achieve
2. What Marketing Efforts are Needed for the Results
When we’ve planned what we’re determined to accomplish, let’s not leave it to chance. Creating a marketing plan that clearly identifies – 1. Who your ideal client is 2. How many of them you want 3. Strategies to attract them and get them to be your client
3. The Operations (Your Delivery)
Three things to consider here:
Plant (Equipment and Systems)
What equipment, including major systems does the business need in order to fulfill the growth desired through the year in serving clients successfully.
Processes – Consistency in delivery can’t be understated
In creating consistency, building processes that can be systemised is critical to the ongoing development of an efficient business. When a business is continually developing a new approach for each client or project, it never creates efficiencies to generate significant profitability.
People – Who is needed and their professional development
We need to consider when new team members need to be added in order to maintain sufficient capacity to serve clients well.
The other side of this is the ongoing development of knowledge and skills within the business that ensures staff engagement as well as effectively serving clients.
4. The Financial Plan
More than just a Profit and Loss Budget. Cashflow is king. All too often a small business owner will create a budget for sales and expenses and believe to have created a plan. Where there is no backup evidence of the likelihood of why those expenses deliver the revenue and therefore the profits the budget is worth little.
Developing a budget that delivers on the performance of the business after careful consideration and looking into: the marketing efforts require, the operating expenses, new equipment purchases, staff recruitment, training and development etc… then you will have a greater likelihood of achieving the business plans.
Even then you need to consider financing, accounts payable and receivable and cashflow of the business.
5. Key Milestones
What milestones will ensure the business completes the year where it should. How can we ensure the business continues is to develop along the planned path within the next year.
Here you draw out the key projects and major milestones to be accomplished so you can establish smaller manageable goals around how to deliver on each as the year progresses.
6. A Balanced Scorecard
What outcomes drive the business to success from the four key viewpoints. The scorecard is an ongoing monthly/weekly/quarterly outcome plan. It measures outcomes rather than activities to ensure the business is delivering on the promise of the business mission and plan.
The four critical points of view are:
The Clients Perspective
What measurable outcomes can be budgeted to ensure you are on track in serving clients effectively?
The Processes perspective
What outcomes ensure that processes are delivering on the promise?
The People Perspective
What outcomes ensure the team is properly equipped and fully engaged in serving clients effectively and efficiently?
The Financial Perspective
It’s about ensuring that the business is meeting budgets and cashflows, that business is profitable and achieving stakeholder returns on investment.
Bringing it Together
A sound business plan creates clarity of what it is about for all stakeholders. It assesses where the business is today and where it is going.
The mission ahead for the next year and key milestones to keep it on course.
The Balanced scorecards help the leadership stay true to the mission and guide constant and improving performance.
Big Business outperforms small business by 1.83 times per employee as measured in terms of value add (according to the ABS in 2016). A sound business plan can have you and your business turn those tables, have you clear about your mission and agile enough to take advantage of opportunities as they present.
Start the year right. Download our Business Self-Assessment Survey to evaluate the current state of your business, and effectively build a Business Plan from there. Click here to receive your gift from us.