Who Needs a Business Plan?

Do you create a business plan each year?  When I ask this question of clients, I will regularly get a chuckle or roll of eyes before I get that reluctant, “yeah, I do.”  The reason for the response is universally that the client DID it, and then promptly put it into a drawer.  A few will proudly admit that they pull it out once a quarter (or sometimes more frequently) and review it, but very few can say they live their business plan (or their goals).

 It’s that time of the year (beginning of the 4^th Quarter) to work on your business plan for next year. Your business plan is probably the most important part of your business, but it has to be living and breathing, monitored and adjusted.  And in its most basic format, it is easy to do.

 Let’s say you told me you are going on vacation.  The first question I would ask is “where?”  I doubt you would say “well, I’m just going to get in the car and start driving.” What are the chances of you getting anywhere? You would not only be able to tell me where you’re going, but how you’ll get there, how long you’ll be gone, how much it will cost, how long it will take you to get there, what you’ll be taking along, who you are going with, etc., etc.  In other words, you carefully plan your vacation.

 So why is it you don’t just as carefully plan your business?  A well crafted business plan designed to make you successful will also keep you on track, be your roadmap (or GPS), and relieve stress.  But even a simple business plan will give you direction, and when used correctly provide so much more for your business.

 The three basic rules to creating a business plan are:

• Start with the end in mind
• Work backwards
• Break it down into smaller pieces

 Start with the end in mind – How much do you want to sell this year? I am not talking net profit at the moment, but gross sales.  Make that decision (See Smart Goals blog article), and don’t be shy.  Be realistic, but it’s no fun unless the number is high!

 Work backwards – Small children go through a learning phase where they constantly ask “why?”  You need to keep asking “How?” Starting with the end, that question will set the steps before.  Each step should also have a “how” attached, and keep going until you get to the most basic “how.”  This identifies your SWOT (strengths, weaknesses, opportunities, threats or challenges.) You may look at a “how” and think to yourself “but I don’t know how.” More on that in a paragraph…

 Break it down into smaller chunks – Time plays a big part in a business plan.  If everything has a deadline of December 31, you will not even look at it until December 1, then shake your head and say “no way!”  So break the steps into shorter or smaller increments, with interim dates.  $1 million in sales for the year is $250,000 per quarter, or $83,333 per month, or $3,846 per day (five day week). Less than $4,000 per day sounds a lot easier to achieve than $1,000,000!  Working with each “how” above, set dates for accomplishment.

 As you go through this exercise, you will discover what extra tools, knowledge, personnel, equipment, or whatever you need to achieve the goals in your business plan.  Excellent!  How are you going to make that happen? Is it something you can do or does it make sense to hire some one to do it? Something you can learn, or delegate for some one else to learn.  These answers become part of your business plan as they are an integral step in staying on target.

 A more robust business plan will certainly improve your business skills and bottom line, but if you at least get this far, you will see a difference.

 The most important step in this exercise is to take this finished plan and place it somewhere to look at everyday.  One of the best places to put the plan (besides hanging on the wall of your office) is to purchase a desk calendar, and transfer the “small chunks” to the calendar.  You will be much more likely to accomplish something on your calendar than on a list somewhere.

 For a free business plan template or goals worksheet, please email me at jbyron@dmbgroupinc.com and I will be happy to send one to you.  Don’t let another year go by without a thorough plan!

Do You Set SMART Goals?

A key part of achieving your goals rests in the goals themselves. They can’t be too lofty, or too simple, and it’s smart to give yourself reasonable deadlines. Here are some guidelines to follow as you create your strategic business plan:

         Specific
         Measurable
         Attainable
         Relevant
         Timely

Specific – A specific goal has a much greater chance of being accomplished than a general goal. Be precisely detailed.  Make sure the goal is specific to one item.  Use the categories of financial, production, career and personal as a way to keep focused specifically on what you want to achieve.

EXAMPLE:    A general goal would be “Make more money.”  A specific goal would be “Make $275,000 in net profit in this fiscal year.”

Measurable – Establish concrete criteria for measuring progress toward the attainment of each goal you set. When you measure your progress, you stay on track, reach your target dates, and experience the exhilaration of achievement that spurs you on to continued effort required to reach your goal.

To determine if your goal is measurable, ask questions such as……How much? How many? How will I know when it is accomplished?

Attainable – When you identify goals that are most important to you, you begin to figure out ways you can make them come true. You develop the attitudes, abilities, skills, and financial capacity to reach them. You begin seeing previously overlooked opportunities to bring yourself closer to the achievement of your goals.

You can attain most any goal you set when you plan your steps wisely and establish a time frame that allows you to carry out those steps. Goals that may have seemed far away and out of reach eventually move closer and become attainable, not because your goals shrink, but because you grow and expand to match them. When you list your goals you build your self-image. You see yourself as worthy of these goals, and develop the traits and personality that allow you to possess them.

Relevant – To be relevant, a goal must represent an objective toward which you are both willing and able to work. You will accomplish what you value most.  But be sure that every goal represents substantial progress. A high goal is frequently easier to reach than a low one because a low goal exerts low motivational force. Some of the hardest jobs you ever accomplished actually seem easy simply because they were a labor of love.  Your goal is probably relevant if you truly believe that it can be accomplished.

Time-Oriented – A goal should be grounded within a time frame. With no time frame tied to it there’s no sense of urgency. If you want to lose 10 lbs, when do you want to lose it by? “Someday” won’t work. But if you anchor it within a timeframe, “by May 1st”, then you’ve set your unconscious mind into motion to begin working on the goal.

Once goals are set you have a clear understanding of what you want, and your mind can wrap around it. It is then much easier to set a path to make those goals happen!