In my experience leading dozens of business planning workshops in countries all over the world, I'd say only about 10% to 15% of teams I've encountered have an effective business planning process. Sounds low, doesn’t it? What many business owners fail to understand is that good planning equals good management.
Let me explain. Planning is about managing resources and priorities in an organized way. Management is related to leadership, and it’s related to productivity.
Here are three steps to get you planning better and, in turn, improving your management.
1. Devise a plan. As the business owner, you start by writing important details down. You don't need to sweat every detail of creating a long document. Instead, jot down essential points as bullets, and tables, and bare explanations. The strategy element of planning is to focus on what you’re good at, what matters, which people are most important to you and what you can do for them. It’s about positioning, determining your target market and product focus.
It's important to document these details in order to communicate your vision to employees. If you don't have a team, there's value in referring back to your original thoughts regarding the path for your business and comparing them to actual results.
Related: 5 Ways to Kick-start Your Business Planning
2. Define success. In order to chart your path, you'll need to define long-term goals. Think broadly about how you see your business in several years.
From there, get specific. You'll want to establish milestones for when you want to accomplish certain goals, and know who you will want to carry them out. Go beyond sales, costs and expenses, and look at what really drives your business. It might be conversions, page views, clicks, meals, trips, presentations, seminars and other engagements.
Then, establish a review schedule -- when you and your team review changed assumptions, track results and make changes as necessary.
Related: Are You a Goal-Getter?
3. Put it in motion. Can you see the management brewing? Tracking and analyzing numbers can help you manage the work behind the numbers. You'll be in a better place to recognize and highlight what’s working and what isn’t working for your business and your team.
Suppose traffic is up, but conversions are down. You collect your data, review it with your team and develop a plan to make changes toward reaching your goals. That's management.
Managing your business successfully requires more than just praise and pats on the back. Sometimes it means focusing attention on problems, helping people solve them if possible, discussing and embracing mistakes, and, in the worst case, weeding out people who don’t care about bad results. This can all be accomplished more efficiently when you have a plan in place.
Related: How to Become a Master Problem Solver
Either way, whether results are better than expected or worse, the planning and tracking makes your follow up easier. The process itself adds commitment and peer pressure to the team. Highlighting good performance is easier when there are agreed-on numbers to define it. And, probably most important, dealing with poor performance is always hard, but not quite as hard when you can focus on the specific numbers instead of personalities or office politics.
Which brings me back to where I began: Planning is management. Without planning, your management is at a real disadvantage.
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Comments:
Its business plan will make or break your company. It is the strategy for your company, but so many business plans are created for the sole purpose of looking good to find funding. But the true value is for the entrepreneur, this is the map that will help the company find its place in the business world. Here is a good resource for Entrepreneurs
I first got introduced to the rapid bizplanning with the Plan as You Go Business Plan book. The title was shocking, to say the least. Two years later, I'm running my ecommerce and publishing site, and the business plan is a napkin-format. Nothing fancy. It did get me started, but as business develops, the Jack of All Trades role needs replacement and division, so I'd throw in a suggestion that whoever runs a business should have in mind that it's all about processes and documenting them. Later, this documentation of what you did, how you did it and why you did it will be very important when you want to employ or even outsource some of the technical parts like site maintenence, product research, social media activity and so on.
Nice tips, getting everything on paper is key. It is a proven fact that the majority of millionaire entrepreneurs write their goals down daily. I am not there yet, but I have a business plan, and I believe that my hard work will pay off. I am a Houston Realtor® who gives cash back to my clients for buying or leasing an apartment or home through me. I work with first time homebuyer's and investors alike. http://cashbackapartmentlocating.com http://har.com/alanharper
Great tips, Tim. There is one thing that I don’t see mentioned in this article that I think can apply to any business out there, especially small businesses, and that is Social Media. As businesses define their goals and major milestones, they should consider all of the social media platforms that could help them build awareness and drive traffic to their website and/or retail location.
It's so great!
These are great tips for small business owners. From funding to day to day management, a business plan is crucial for success. http://blog.celticbank.com/
Nice post.
Hello Tim. This is an excellent article. The two specific points that I believe need to be double bolded and underlined are setting measurable goals and follow up. I am a small business consultant and have been involved with the rescue of several businesses that were close to failure. In almost all cases there either were no plans at all or if there were they had been hidden away soon after start-up and were never looked at again. An interesting point that I often came across was that business owners who had actually set goals and even target dates had often overlooked to match this with actions required to achieve their goals. Needless to say, tracking and analysing is impossible under those circumstances and business failure is almost assured.