Use Your Leadership Style to Make Your Best Business Plan Yet
Find out what kind of a thinker--and business owner--you are by asking these strategic questions.
Opinions expressed by Entrepreneur contributors are their own.
Funny, isn't it, how just getting started is often the hardest part? I think that's true of business planning. Avoid the inertia. Get started, get going and don't wait.
How do you get started? It's important to realize there are many different ways, and the best choice for you depends on the way you like to work.
In Start with the Review Schedule , my March 2008 column, I suggest that you start by setting the review schedule. That's still one of my favorite starting points, because it sends a clear message about what the planning is about and how it'll help your business.
However, maybe you're a concept person, a strategic thinker. That's great. Stick with that, and start your planning with what I call the heart of the plan, the core strategy. Take a step back from your business and ask yourself four key strategic questions:
- What am I really selling?
Ask yourself why people buy your product, what they're getting from your business that they can't get elsewhere, and what wants and needs drive their decision to buy your product.
- How do I want my customers to think of my business?
Ideally, what words or phrases would they use to describe your business to a friend? Are you reasonably differentiated? What's the key message customers should be getting?
- What am I really good at? What do I (my company) do better than anybody else? Am I correctly focused on that core competence?
- What do my customers want that I'm not giving them?
But perhaps you're more comfortable with numbers than concepts. That's not a problem; no apologies necessary. In that case, consider these three tips:
- Do a sales forecast. Break your sales into components, such as specific products, groups of products, channels or buyers. Project it if possible into units, price per unit and cost per unit (not always possible, but a good idea when you can do it). You'll discover that as you project your estimated sales, you're thinking about some of the core strategy questions above, which will be implicit in your numbers. And once you have a sales forecast, you can start tracking results, which leads to your planning process.
- If you're a startup company, estimate startup costs. That includes expenses that occur before your first day of business, such as legal expenses, fixing up a location, developing prototypes; and the assets you'll need to start, such as equipment, starting inventory, and--oh, yes--cash in the bank.
- Estimate your expense budget. If you like, call it a burn rate. What do you think you'll be spending for rent, payroll, utilities, marketing expenses and everything else? As with the sales forecast, this gives you something to track, so you can start planning.
Alternatively, perhaps you like to-do lists better than numbers or concepts. In that case, start your plan with milestones: dates, deadlines, business activities, how much they're going to cost, how much they're going to produce. These are concrete specifics.
The key here is to get started and get going. People are different, so start anywhere you like; it won't matter. You'll fill in the rest when it's needed. This way you'll be able to see results quickly, and that will help you stay motivated as you do your planning.