By nature, entrepreneurs are passionate, driven, and courageous, ready and willing to charge hell with a water pistol. Yet, many business owners are poor planners. Author and businessman John L. Beckley said it best: “Most people don’t plan to fail. They fail to plan.” Oftentimes, you’re so consumed with daily business operations that you don’t take time to plan for the future. Inevitably, you experience set-backs and failures that keep you in a hamster wheel of day-to-day worries. But there’s hope. By instituting a business planning process within your company, you can disrupt your present weaknesses enough to make them tomorrow’s strengths.
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This article is the first in a mini-series about Planning within a larger series about the 8 Foundational Components That Drive Up Your Business’s Value.
“By instituting a business planning process within your company, you can disrupt your present weaknesses enough to make them tomorrow’s strengths.” – Justin Goodbread, CFP®, CEPA®, CVGA®Click to tweet
Everyone plans. What are you wearing today? What will you eat for dinner? Who’s watching the kids? Many times, you concentrate on your short-term plans more than your long-term plans. You prepare for life’s immediate concerns instead of preparing for future prosperity. But, as an American statesman, entrepreneur, inventor, and author, Benjamin Franklin said, “By failing to prepare, you are preparing to fail.”
As a small business owner, you tend to do the same thing. You fret about immediate needs and issues in your business more than you plan for the future of your business. In a press release about The Alternative Board’s (TAB) latest Business Pulse Survey, reporter Richard Carufel notes that “the average entrepreneur spends 68.1% of the time working ‘in” their business—tackling day-to-day tasks, putting out fires, etc.—and only 31.9% of the time working ‘on’ their business—i.e. long-term goals, strategic planning.” Additionally, Corporate Value Metrics, a national corporate consulting company, says that business owners typically work harder on the other seven fundamental components that drive up your business’s intrinsic value than they do on planning.
Knowing that most business owners fail to plan properly, what exactly is business planning? According to the Business Dictionary, business planning is “The process of determining a commercial enterprise’s objectives, strategies and projected actions in order to promote its survival and development within a given time frame.” I agree that business planning needs to be done within a time frame. I also agree that it’s a process. However, this definition fails to address available resources. Just because business owners layout plans doesn’t mean they can afford to act on them. Therefore, I would revise the definition of business planning as follows:
Business planning is a basic management function involving the design, steps, and quantified resources needed to achieve the optimum balance of needs or demands with available resources.
Ultimately, the definition of business planning can be seen in the business planning process. Whether you’re planning your business’ opening, growth, projects, risk mitigation, sale, closing, or anything else, all planning begins with a process. Although you can make the planning process as long or as complicated as you’d like, I tend to break the process into 4 Basic Steps.
Identify goals or objectives to be achieved. It has been said that if you aim at nothing, you will hit it every time. The same is true for your business plans. In order to create an effective, quantifiable, and measurable plan, you must clearly define your goals. A plan without a goal is like charting a course for nowhere. You will just continue working in perpetuity to reach a goal that doesn’t exist.
Formulate strategies to achieve the goals or objectives. Once you’ve defined your goals, create a set of tactics and action steps to reach them. It’s a good idea to include your team in this process, as they will likely be the boots on the ground that are working through your strategy. Likewise, they may be able to help you find the best way to achieve your goals because they will have first-hand knowledge of what tactics work within your existing operations.
Arrange the people required to work on the strategies to achieve the goals. Be clear in communicating who is responsible for what. Additionally, you need to set a timeframe that is both realistic and challenging. If you ask for the work to be done in an unrealistic amount of time, the group may not put any effort toward accomplishing it because they know that it can’t be done. Likewise, giving too much time could breed procrastination.
Implement, direct, and monitor the steps of the action plan. Once your team is set and they understand what is expected of them and when it is expected to be done, then you need to be consistent in following up with them. Regular check-ins keep the task fresh on their minds and enable you to offer additional resources if things are falling behind. Similarly, these follow-up meetings will help you to identify and address any problem areas that may need to be adjusted.
I think that’s the way any type of business planning works. Those are the actions business owners, managers, and employees must take to make a business plan. Yet, while you’re going through the business planning process, you must include the following items within your plans:
Compiling all of those details is tedious. The business planning process can be frustrating and hard. Oftentimes, it causes disruption in business operations. It does. I get it. When you’re doing any type of business planning, you’re going to look at your business – your baby – and realize it’s ugly. You’ll see a need to change things, and that creates conflict. Yet, just because it’s hard doesn’t mean it’s bad. Just because it’s tedious doesn’t mean you shouldn’t do it. Conflict can be good. These planning details are good for you, for your team, and for your business.
Remember, in order to affect the future, you must disrupt the present. You have to create some turmoil to make improvements. Think about a rocket ship. In order for a rocket ship to go upward into orbit, it must have combustion or “disruption.” Similarly, planning often disrupts business because it makes you stop and think about what you’re doing well or poorly, giving you a chance to improve upon and fix things.
Be sure to join me in my next article within this planning mini-series where I deal with, the Strategic Planning Process – the next step in business planning you must do to give your team direction and accomplish long-term goals!