Developing a Plan – What’s In It For Me?
In my last article, I described the process of Profit Planning. ‘Tis the season for this type of activity as we close out one year and plan for the next. As you may recall, I outlined my 4-step process for preparing the Profit Plan:
How did you do with developing those items? Once you have that information together, it’s time to prepare the Profit Plan and Forecasted Cash Flow. You can do this in Excel, and I’m going to provide you with a template and simple steps in my next article.
For now, I think it’s worth looking at the “why” behind a plan. To explain this best, I contacted my colleague and friend, Bob Dodge. As a Long time Trusted Advisor to Business Owners in the Denver Area, Bob has a great deal of insight into this topic.
I asked him to share his thoughts, and here’s what he had to say:
Many business owners don’t value the benefits of planning. As with anything worth pursuing, a plan is a critical path to success, no matter what your goals. It’s similar to things that we might undertake in our personal lives, like building a new house, hosting a party, or taking a family trip. When we embark on any endeavor – big or small – we need to understand the resources and requirements for success, as well as how we’ll coordinate those resources for the best outcome.
Let’s take the house building example. What happens when, on a Monday morning, the electrician shows up, along with the painter, a truck full of lumber, and some toilets and sinks? What do you have? A chaotic, disorganized mess, for certain. You would not think of building a house without planning the layout of the rooms, the milestones of who does what, a schedule of when it’s slated to be done, and how much it will cost. Why would you run your business in a chaotic manner?
Contrast this with a clear understanding of your company’s vision of success, the major elements needed to be successful, and a plan for each resource required. Planning can be as focused as putting to paper the 5 most important things you want to accomplish in the coming year. Once you have those 5 things defined, you can build a plan to reach those goals and objectives – that’s what planning is all about. Specifically, and for each of those top 5 things you can determine:
- Strategies to reach those objectives or goals
- SMART Action plans to execute those Strategies (Specific, Measurable, Achievable, Resourced/Responsible Party and Time Bound)
- Key Performance Indicators (KPIs) around those actions; in other words, how you’ll know you’ve achieved your goals or are making progress along the journey
- Resources required (people, money, time, space, etc.)
A plan enables you to not only focus on what you want, but eliminate what you don’t want. For example, having 30 things to focus on instead of 5 can easily result in chaos, frustration, and bad morale – things you definitely do not want. Focusing on a manageable number of goals helps you and your company best utilize the appropriate resources, whether that’s your time, your money, the conference room, or the management team.
You must share this plan with your team and make sure there is both buy-in and follow-up. When your team is aligned to work on the most important, most urgent items, they move beyond merely “hoping” for improvements. Well thought-out plans turn into actionable items that, when given the appropriate focus, lead to success.
Whether you want to implement new CRM software, reorganize your management team, improve your marketing impact, or increase capacity for your operations, it’s all very doable with a plan. A plan also equates to less stress and more effective and efficient processes that lead to results. What does a plan have to do with the success of your company?
About Bob Dodge
Bob Dodge is a business owner with 25 years of experience helping teams develop and implement strategic and project plans to get results. He coaches business owners and facilitates peer advisory boards of non-competing, like-minded people who want to help each other think differently and hold each other accountable to take their businesses to new levels, so they have more time and freedom to enjoy life! You may reach him at firstname.lastname@example.org or visit www.tabdenverwest.com.