I apologise for the title, but I see so many smart people with so many great ideas fail to make the grade and do you know why? They simply fail to develop and implement an effective business plan.
In my experience in leading dozens of business planning workshops across the world, I’d say only around 10% to 15% of the small to mid-cap teams I’ve encountered have an effective business planning process.
Why is this? Why do so many business owners fail to understand that good planning equals good management and that in turn, builds a great business? Am I missing something here? Can it truly be such a hard concept to sell, so hard for a burgeoning entrepreneur to grasp that a sound business plan could secure their future?
So back to the title……simply put it reflects my sense of frustration!
It’s not hard; business planning is about managing resources and priorities in an organized way. It is a function of leadership, and good leadership and management is directly related to productivity.
How can we fix this?
Well here are three very easy steps to help get you planning and, in turn, improve your management, productivity and performance.
1. Write a plan. Many business plans are written to look good and impress investors, banks and other external parties. What we are looking at here is a simple document designed purely to help you as the business owner manage better. Start simply and just jot down the essential points of your business as bullet points, tables, and short explanations. The strategy element of planning is to focus on where you want to be, what you’re good at, what matters to you, which people are most important to you and what you can do for them. It’s about positioning, determining your target market and product focus.
It’s important to write these details down in order to commit to your vision and to communicate your vision to close stakeholders such as employees. If you don’t have a team, there’s value in being able to refer back to your original thoughts and ideas for your business and to compare them to your actual results.
2. Set Milestones. In order to check your progress, define and then include your long-term goals. Think in general terms about how you see your business developing over the next three years.
From there, get specific. You’ll want to establish milestones for when you want to accomplish certain goals, and know who you will want to carry them out. Go beyond sales, costs and expenses, and look at what really drives your business. It might be conversions, page views, clicks, meals, trips, presentations, seminars and other engagements.
Then, establish a review schedule — when you and your team review changed assumptions, track results and make changes as necessary.
3. Implement Your Plan. Involve your team and encourage ownership of ideas. Tracking and analysing numbers can help you manage the work behind the numbers. You’ll be in a better place to recognize and highlight what’s working and what isn’t working for your business and your team.
Suppose enquiry is up, but conversions are down or revenues are up but margins down. You collect your data, review it with your team and develop a plan to make changes toward reaching your goals. That’s management.
Managing your business successfully requires more than just praise and pats on the back. Sometimes it means focusing attention on problems, helping people solve them if possible, discussing and embracing mistakes, and, in the worst case, weeding out people who don’t care about bad results. This can all be accomplished more efficiently when you have a plan in place.
Related article: – The Power of Marginal Gains | http://wp.me/p401Wv-di
Either way, whether results are better than expected or worse, the planning and tracking makes your follow up easier. The process itself adds commitment and peer pressure to the team. Highlighting good performance is easier when there are agreed-on numbers to define it. And, probably most important, dealing with poor performance is always hard, but not quite as hard when you can focus on the specific numbers instead of personalities or office politics.
Which brings me back to where I began: Planning is management. Without planning, your management is at a real disadvantage.
“The Essence of Business Writing” is number two in a series of ten “Essence of Management Articles”
You may have rattled off brilliant essays throughout school or university; however, business writing is tough. It’s full of subtleties and more dangerous than a minefield. It is a make or break it skill which everyone in business really needs to be on top of.
If you cannot clearly and simply convey your ideas into business writing for others to follow; or write a concise, accurate and compelling business plan you are going to struggle to communicate with and develop the teams and structures you need to succeed in business.
Even in today’s seemingly casual environment business writing skills are vital. A well written email will deliver you a far better result than a weak one and a well written business plan, loan application or equity document can make your future just as surely as the reverse is true.
As a new graduate I was allocated to the office of the Finance Director a man of terrifying intellect and a reputation for the fiercest temper on earth. I recall in my early days that sitting in his large and plush office, which was always filled with clouds of cigarette smoke, scared me to the point that my mouth was too dry to use for speech and my bladder always appeared to be filled to maximum discomfort.
After a few weeks I was called into his office and he handed me a large clamp file of photocopied ledgers, notes, calculations, drawings and photographs and said “Can you turn this into a report on the cost savings to be made at the Victorian pipe plant? Nothing too detailed, say about ten pages; need it for next week’s board meeting” I nodded speechless and backed out of his office.
I froze, at last I understood “analysis paralysis”, I spent the rest of that day shuffling the papers and a large part of the next day doing the same. I could see and understand the data but I had no idea as to how I could even start to translate the complex data into a concise, meaningful and interesting report.
This was a test and I knew the cost of failure.
After hours of terrifying inactivity I thought back to my school days and how I used to piece together essays and I came up with the following written list of questions to myself.
What is the purpose of the document
What am I trying to say
Who am I saying it to
How do I present the information
Have I quantified/qualified my facts
What is my conclusion
Does it make sense
Have I proof read it
My eight point format worked, the report was well received and importantly I still use this list today!
I think on that day I reached “The Essence of Business Writing” and it lives on. Let’s see how the 8 point essence can help you.
What is the purpose of the document: If you cannot answer this question clearly in three lines don’t write it because no one needs to hear it.
What am I trying to say: I literally write or type this question and its answer at the top of my first draft page of any complex document as I start to write. I limit both question and answer to four lines each and if I have difficulty with space I rethink the documents whole premise. This question and answer should be at the core of every single communication even a simple email – though I usually allow a mental Q&A for emails.
Who am I saying it to: Each audience has differing needs and expectations. Think this through; ask what will make a difference to your target audience. You are best to use a “different voice” depending on your intended audience. Therefore your writing style, words and authority should change accordingly. The facts are the facts but the audience changes.
How do I present the information: Remember when you start to write your report you know the subject backwards. Your reader is in your hands, take then on a sensible, fact backed and sequential journey finishing with a tight summary and sensible conclusion.
Have I quantified/qualified my facts: Your discovery that blue widgets outsell red widgets 10 to 1 is astonishing but when supported by respected research your discovery is in lights and your career is taking off. It’s all about cred! Yes research credibility brings respect.
What is my conclusion: In a well-researched, balanced and carefully thought through piece of business writing the conclusions will slowly emerge. Sometimes not the ones you or your audience wanted. Facts are facts and conclusions are drawn from those facts. Always call it as it is, don’t dress it up, a “bad” answer is much better than the wrong answer.
Does it make sense: In today’s world email a draft to a friend or mentor, their subject knowledge will usually be less than yours so see if it makes sense to them. Listen to input, take it on board but ultimately it’s your report and your decision.
Have I proof read it: The more important the document the more important the proof read and I don’t mean a computerised spell checker. Don’t tell anyone but I still have issues here. I check, I double check, my dog checks and yet every time I press “Publish” half a dozen errors flash in front of my eyes!