Do You Have a Strategic Plan for Your Business?
If a strategic plan is one of the critical factors in Business Success – why doesn’t everyone do it?
And of those that do make a business plan, the vast majority don’t make use of it as a tool for tracking where their business is. The plan is gathering dust at the bottom of a drawer or in a filing cabinet somewhere. And the reasons for writing it are long forgotten!
“Planning is bringing the future to the present so you can do something about it now”
Successful entrepreneurs consistently state that planning, setting goals and sharing them is a critical element of team building and getting their fledgling businesses launched into the stratosphere.
Any planning is worthwhile as long as it is then supported by appropriate actions. Planning for planning sake is an excuse for procrastination – the thief of time!
The problem is creating a STRATEGIC PLAN appears to be difficult, time consuming and overwhelming for many business owners.
Have you considered engaging with expensive consultants to build your business plan? Or have you had a plan written for you that you don’t understand or that is unrealistic and unengaging?
Some of the reasons for lack of planning include:
- Feeling overwhelmed
- Lack of skill
- Don’t know where to start
- Thinking it won’t make a difference
- Not enough time
- It’s too expensive
- I’m not looking for investment
In reality making a plan, writing it down and measuring your progress against it is one of the biggest factors in the success of both commercial enterprises and life!
It doesn’t have to be complex.
The simpler it is the better.
97% of business owners have no plan for growth
It should be shareable, understandable and engaging for all the people involved in the business.
“If you can’t explain it to a 6 years old, you don’t understand it yourself”
Dealing With Overwhelm
As a business owner, you already have too much to do in too little time. In a 2017 survey 72% of business owners said they were feeling overwhelmed on a daily basis.
Running your own business can mean being involved in every activity, often at the same time. You can be juggling responsibilities of a business with trying to be a good spouse and parent, feeling that if only you had someone to delegate some of the decision making to then you would be able to make some significant progress in the business, and be less stressed and distracted when you are at home. You would rather feel like you are in control than chasing your own tail and getting nowhere.
Even before you get a business off the ground, the planning stage often feels like the hardest part – multiple distraction, new “bright shiny things” and doubts about whether you really have something of value often set in to derail you before you get moving.
The plan itself should be simple with some over-arching goals at its core. Making a plan does not have to be complex. The simpler it is, the easier it is to follow and explain to other. It helps if you have a clear idea of what it is you want to achieve and, more importantly, WHY you want to achieve it.
Launching a business is not for the faint hearted!
Few businesses last more than 10 years, less than half last 5 years and over 30% fail within 24 months. Reminding yourself of the reasons you are doing it will become key to keeping positive when the going gets tough.
As you work through this book you will no doubt end up with a to-do list and at some point, if you want to change what your business is achieving, you are going to have to take action. Prioritising those activities will be a fundamental part of your success so make sure you list all the things you need to do then prioritise them, then schedule them.
Ideas don’t pay the mortgage ACTIONS do!!
The road ahead may be rocky – existing business owners will know this from experience – so to keep going you need to need:
- To have a clear PURPOSE;
- A bucket full of PASSION,
- To know that the business is FINANCIALLY VIABLE and
- Know where your CUSTOMERS are, who are willing and ABLE to pay for your services or products.
You may have to work some gruelling hours, take on a lot of responsibility and motivate your staff and other partners through the economic ups and downs.
You need to take care of yourself and remember if it were easy everyone would be doing it! Equally it is not the place for martyrs and if you don’t have a passion for what you are doing, or it is making you miserable, then it might be time to reassess whether you should continue.
BOOK RECOMMENDATION: The One Thing by Gary Keller
Gary Keller really gets to the crux of a lot of the barriers that entrepreneurs, or anyone with a big task, experience to achieving what they need to in a set timeframe. Procrastination is the enemy – but it’s so easy to do. Using the mantra “What is the one thing, such that by doing it now, everything else becomes either easier or irrelevant?” as a way to keep focused.
It’s a quick and easy read and always on my book recommendation list for both start-ups and experienced business owners alike.
The Difference Planning Makes
Failing to plan is planning to fail
A carefully, well thought out plan can make a significant difference to what you will achieve in a specific period of time. Planning helps you and your team make the right short-term decisions to achieve long term goals. If goals are clearly articulated and joined up with a vision and shared values, then the company has a framework for making effective and speedy decisions.
Planning can be separated into 3 types:
- Tactical; and
And to avoid confusion it’s worth showing the dictionary definitions of each type of plan.
- Strategy is simply a plan of action designed to achieve a long-term or major aim;
- Tactics are actions carefully planned to achieve a specific end;
- Operations are an active process; a discharge of a function.
There doesn’t seem to be a huge difference between Strategy and Tactics but those differences are subtle. Strategy is “what has to happen to achieve a long term aim”. Where as tactics are “what has to happen to achieve a specific outcome”, which is why it’s often referred to as short term planning.
So what difference does strategic planning make in the real world?
Having goals allows the business to be clear about its market positioning and who its customers are.
If you are in a crowded market, having a clear image of your ideal customer is critical to success so that your messages are laser focused on exactly the customer or client you are aiming at. Those who are willing and able to pay for the products or services you offer.
As the old saying goes “what gets measured gets managed” – or in some quotes replace “gets managed” with “gets done”. A key part of the planning process is following up on the progress that is made.
Goals make it easier for activities to be prioritised. Work is focused on those activities that are important to the achievement of the long-term ambitions of the organisation.
Big goals can be broken down into smaller, more manageable ones that are less daunting.
When goals are shared with the entire team or external partners the resulting actions reduce waste and errors.
Having a plan means you have an idea of what the desired result looks like – effort, thought and direction can be focused on the right outcomes. Along the way, actual results are compared to the plan and variances can be addressed.
So if the plan underestimated demand for a particular product or service and you can add or divert resources to a different range of activities or vice versa. All the planning in the world won’t make a business successful, there must be ACTION!!
With a plan in place it is easier to make short term changes in direction whilst still maintaining the direction of the long term mission.
The world is changing at an increasing rate – technology developments, changes in social attitudes and legislation can all impact your business and demand rapid changes in the way you operate or the way your customers perceive you.
Being flexible allows changes to be acted on more quickly in light of a lot of change.
When long-term and short-term goals are written and shared as part of the planning activity, you are setting a framework for your team to make effective decisions without constant referring back to you alone.
More effective, better quality decisions can be made in a timely manner. It is easier to respond to any diversion from plans or prepare for contingencies if there is a plan in place.
Sharing a common goal with your team increases their engagement and commitment to completing tasks that benefit the company. Having employees work toward a common goal promotes an interdependency among co-workers. If each team member pulls together they will become more productive than the sum of their parts.
A cohesive workforce increases employee satisfaction and motivation. Incentivised and collaborating employees come into work willing and prepared to deliver value. A lack of cohesion leads to a stressed and tense cohort – leading to employees who do not work well together, reducing productivity and quality.
Measurement and Control
Using a plan to measure results gives management information more context. It only has context if it can be easily understood and read by the audience.
I have seen plenty of management reports that are presented in such a way that leads to confusion rather than clarity! In one case the report was over 100 pages long – and when clumps of pages were randomly removed each month, no one noticed!
Getting the correct measures and controls in place aides accurate and timely decision making and business growth.
Management accounts and information should be presented in the clearest way possible and in a format to enable the reader to be able to assimilate the information and make necessary decisions. Most management teams do not respond well to large tables of numbers – in most cases a simple graph is enough. Like business plans, management information is best kept simple and highly relevant.
How to make planning easy
Planning is often more difficult if you are starting with a blank piece of paper!
Using someone else’s complicated framework or template can lead you to a plan you don’t understand or that doesn’t have the information you need.
There are some great planning tools out there for making getting a plan in place easier. Whilst it might be tempting to use any one of hundreds of APPs and electronic models, you may also find these distracting or difficult to learn – after all trying to do something that you already feel is a challenge when also learning how to use a new tool or App will feel like double the effort.
There a great tool that I have used with huge success that are very simple: The 12 Week Year (90-day planning)
The real benefit of the tools in The 12 Week Year is their simplicity and ease of use. There are many other equally effective tools, these are just the main ones I use more often than any others.
Plans are only used if they are understood, and they are more easily understood if they are simple.
The 12-Week Year principle is set out in a book written by Brian Moran and Michael Lennington with the sub-title “Get More Done in 12 Weeks than Others Do in 12 Months”.
It outlines a number of tools and techniques that build to generate good habitual behaviour and get you being more productive than ever before.
And it works!
There are no “get up before you go to bed” gimmicks here, and it really gets to the heart of why some people get a lot done right before they are about to go on holiday – because deadlines work!
By breaking down your goals into 4 sessions of 12 weeks you can break your annual plan down into smaller goals that are less overwhelming and easier to achieve – taking small steps towards the major goals each week and keeping your performance on track.
All of the tools are quickly and easily explained in the book with some online supporting documents to help you get started. Some daily habits can be quickly built in a few minutes that will keep you on track and galloping towards the success that has alluded you up until now.
Planning case study – UXB!
Beating the Bomb! – How an Unexploded Bomb Challenged Success of a Major Construction Project
With a variety of different property investments across the UK and Channel Islands, the Commodore Group looked at how they could leverage the use of space and get better yields out of further development. They already had a logistics hub on the outskirts of Portsmouth in a run-down area, surrounded by small plots of land encumbered with crumbling warehouses, abandoned engineering works and a scrap yard. The whole area was uninspiring and undesirable but, to the trained eye, had huge development potential.
The main challenge was each parcel of land was too small to develop on its own and the ownership of the small plots was fragmented and included a piece of neglected public road. It was going to take a lot of patience, persistence and planning to make something work but when it did the value would be returned many times over.
A complex and detailed plan was devised to extend the exiting working logistics depot, creating a purpose built ambient and chilled store for fresh produce for a major customer. This would facilitate easier transportation of produce into to the Channel Islands and France. It would also ensure exclusivity on the freight ferry service, which was also in the Commodore group of companies. Overall a WIN/WIN/WIN for everyone involved.
Meticulously planning prior to the start of the project was critical to its success. Complications included the purchase of multiple pieces of land and obtaining the necessary planning permissions. Over all the project was expected to take 5 years to completion. A date was set for the opening of the facility, contracts were signed and commitments with penalties for delayed delivery were an intrinsic part of the deal.
The countdown started!
The area required was broken into a combination of land that was privately owned, some land with unknown ownership, and a small length of public road.
Researching who owned each piece of land so that the entire parcel could be purchased and amalgamated into one property was extremely time consuming. Each plot had the risk of being owned by someone who didn’t want to sell. There was a lot of red tape needed to be unraveled. The project could fail at any of these points before any ground was broken.
Whilst the planning permissions were applied for, all of the ownership issues were resolved and when the final red tape challenges overcome, the ground was broken. Digging started and it seemed that it would be plain sailing at every part of the jigsaw started to fall into place.
Things were looking positive in every way – the champagne was on ice.
Before the start of the project we had already secured rental income for the chilled unit from a major customer, with significant penalties for any delays in delivery. Commercially it became even more imperative to complete the project to deadline.
By the time the initial ground works were started it even looked as if the construction was going to be ahead of time, everyone had relaxed into the feeling of a job well done and that all the stress was behind us. Until…..
The day was overcast and the clouds felt heavy with rain, which was one of the major delay risks for the project as a whole. So far the weather had been kind and progress was going well. The previous winter had been the wettest on record so we were hoping for a drier year. The day started as normal, the construction workers now wearing more layers as the temperature was dropping.
Suddenly a cry to stop goes up and all the site activity stopped as if the pause button had been pressed.
The alarm went up and everyone started to evacuate the site. The emergency services arrive and it became clear that work wasn’t going to start for a while. The digging had uncovered a 200lb unexploded WW11 bomb – at the time, the largest to ever be found on mainland Britain – all work stopped the moment it was uncovered!
As the Bomb Squad rolled all its personnel and equipment onto the site, the entire immediate area was cleared – a large area with dozens of businesses were closed. With the obvious threat to public safety, a sizable part of the City of Portsmouth was ‘closed down’ for 3 days. The disruption caused chaos to through traffic and businesses alike.
The potential impact on our deadline and budget was significant – the contingency in the project had not accounted for such an unpredictable upheaval.
The initial planning had been so detailed and a lot of the risks had been assessed (though not finding a Bomb!) It was a challenge to make such drastic changes to the timetable of activities in the project but it was achievable. Whilst the open date for a large part of the project was now set in stone, other aspects of the build could be rescheduled.
This impacted the budget, but because each area of the planning process had been shared with the main stakeholders, the overspend was kept to a minimum. Scheduling the completion of the parts of the project that had a commercial impact and would reduce penalties was easier because of the planning process.
With our extremely detailed financial and project build plans we knew exactly what impact this was going to have and how we could work towards negating any possible damage to the project.
Some property developers do not prepare adequate contingency plans, instead hoping that everything will run smoothly.
They rely on using general rules of thumb rather than even a simple outline written plan with milestones and deadlines. Detailed planning is often viewed as costly and unnecessary.
Conversely continuous planning and changing decisions without understanding the numbers can easily kill any profitability in a project – you have to get started.
I’ve seen many occasions where the plans are stored inside the head of the project manager! The down side of this is that no-one else can see the wider picture. It confounds the contractors or builders who have to constantly refer back to the project manager and cannot plan their work forward if there are changes in circumstances. It leaves the developer becoming a bottle neck and unable to hand over the reins if he / she is unable to manage the site. If the project cannot be reviewed as a whole then anyone involved cannot make the right decisions, allowing necessary amendments if a crisis should occur.
And lack of planning is not just a small business problem. Many large businesses plan at a senior level but fail of communicate to their employees. Lack of clarity diminishes the planning process by reducing the decision-making capacity of the staff at the front line.
In this case the Commodore Group were handsomely rewarded for the time they took to undertake strategic plans and the detailed project planning agreed at the start. Having the flexibility necessary to re-prioritise budgets and to a degree, timescales, allowing us to react effectively to the unforeseen circumstances.
Throughout the project we adjusted the financial impact, spending more money by implementing double shifts on the building work. We could easily identify what needed to be accelerated and therefore would have the most impact on the progress of the project, despite the enforced delays.
By using a phasing technique, made possible by our prudent pre-planning, we were able to open the essential areas of the new facility whilst the remainder were still under construction, allowing us to effectively meet our customers’ needs.
Despite the ‘close down’ of a city, and the 8-day delay that had been anticipated from the setbacks, the project completed on the date required for our clients. And, remarkably, within a few % of the original budget, making this a true success story.
Are you stuck in the day-to-day of your business with no time to plan for the future? A Professional Business Mentor is just the leverage you need to get out of the rut and flying. Discover how you can make your business worth more AND avoid leaving money on the table when you finally leave your business. Click here to contact Christine by email alternatively you can book a call with the Business Mentor of the Year 2020, author and speaker. Who helps business founders get their businesses exit ready so they can enjoy a happier, richer future. She saves them THOUSANDS and increases the value of their businesses by MILLIONS.