Planning for your business in 5 easy steps

Planning for your business in 5 easy steps

Why bother taking the time to plan?

Planning really does prevent poor performance.  With an ever-increasingly competitive environment out there and the day-to-day chaos of everyday life, it can be too easy to slip into the reactive rather than pro-active mode of operation for your business.

We promise, however busy you are, spending some serious time out to work on your business rather than just working in it will pay massive dividends, both in terms of your business performance and your own personal well-being – you’ll feel more in control, less stressed and have a real sense of purpose in all that you do. As the saying goes: “fail to plan, plan to fail”.

Step 1: Situation Analysis

Before getting carried away and jumping straight to step 3 - Implementation, it is so important to lay the groundwork first in order to improve your chances of success.

Before you can move forward, you need to have a good look at where you are now, and the hows and whys of how you ended up where you are in order to progress to where you want to go.

A very quick, simple tool to use is the following feed-forward analysis:

INSPIRES

What inspired me?

WORKS

What worked well?

 

 

 

 

 

 

BIGGER & BETTER

What was ok but could’ve been better?

MISSING

What didn’t happen & why didn’t it?

 

 

 

 

 

 

 

This holistic analysis needs to be looked at in conjunction with the financial performance of the business - the figures are black and white and can’t be ignored; the greater understanding you have of how the money flows in and out of your business the more control you will have. You will begin to see patterns of cause and effect, learning how to improve your profitability and effectiveness and not just your turnover.

  • A goal is a high level quality description of the outcome you want to achieve e.g. to become market leader
  • An objective is a specific measurable outcome that defines your goal e.g. grow market share to minimum of 40% by end of year
  • A strategy is the high level plan you will to achieve a goal e.g. introduce XYZ new service to outsmart competition
  • A tactic is a specific action you take to achieve the goal e.g launch new service with defined marketing campaign

Step 2: Goal Setting

Goals are dreams that you want to become reality. What do you want to accomplish this year?  What is it that you want to achieve (this can be short or long term)?  This is the answer to the question ‘where do I want to be?’ It doesn’t cover how you are going to do it. Goals are a stepping stone to an end purpose for your business.

Step 3: Setting your objectives

In order to achieve your goals, you must set specific time-constrained quantified objectives – what do you actually need to do in order to get to where you want to go.  Ensure that your objectives are as detailed as possible and SMART:

Specific

Measurable

Attainable

Realistic

Timely

Step 4: Strategy

The strategy is about the whats and not the hows. It is the process of identifying what you will have to do in order to fulfil your objectives. The strategy can also be the solution to a problem.

Key characteristics of successful businesses

Professor Malcolm Mc Donald is known as the forefather of marketing strategy, having written over 45 books on the subject, his wisdom is worth taking on board! He states that winning companies have excellent products, efficient processes, happy employees and excellent marketing.  So, how do you achieve this for your business?

Excellent Strategies

Weak Strategies

Understand markets in depth

Always talk about products

Target needs-based segments

Target product categories

Make a specific offer to each segment

Make similar offers to all segments

Have clear differentiation, positioning & branding

Have no differentiation, poor positioning & branding

Leverage strengths, minimise weaknesses

Have little understanding of strengths & weaknesses

Anticipate the future

Plan using historic data

 (Source: Malcolm McDonald on Marketing Planning)

Creating Value

Cost cutting is finite (whether dropping sales prices via continual offers and discounts, or continually lowering your operating costs to the expense of quality) – it is merely a short-term fix and if over used can actually be detrimental to your business.  In order to build long term sustainability for your business you must look to build on long-term competitive advantage by adding value. Value, unlike cost-cutting, is infinite and a key component to building your brand – creating value, communicating it and then delivering it. Value drivers include:

  • Market knowledge
  • Customer loyalty
  • Strategic relationships
  • Strong brands
  • New product development

Creating a strategy statement for your business

Mission             Why we exist

Values              What we believe in & how we behave

Vision               What we want to be

Creating value for your customers is the key to long-term sustainability for your business and as such, your strategy should be customer-centric - your guiding light, your game plan; having your customers at the heart of everything.

Step 5: Implementation

Tactics

The tactics are the specific ‘doing’ part of your plan, putting it all into action - who does what and when. This is perhaps where your Gantt style charts and spreadsheets come into play!

Success factors and indicators

Be clear on what you deem as the key indicators of your business’ success (Key Performance Indicators or KPIs).  What does success look like for your business? This stems from your overarching goal with the tangible indicators including elements such as:

  • Turnover
  • Net profitability
  • Cash flow/debtors/creditors
  • Positive reviews/testimonials
  • Staff wellbeing

These indicators will give you, at any time, a clear snapshot of how your business is performing and can be used to monitor and assess progress against your goals.

Indicators are as such the effect and in order to really be in control of your business you need to grasp what causes these outcomes – your ‘critical success factors’ – what can you do to affect the success of your business?

  • Customer loyalty (repeat purchase, transaction value)
  • Brand recognition/engagement (social interaction, marketing responses, click-throughs, open rates)
  • Productivity/work flow (efficiencies – order turn-around, supply chain)

What you are wanting is to make it easier to analyse what is happening and why it is happening.  This enables better decision making and influencing the right things to change in order to achieve your goals.

Metrics & Control

You must constantly and consistently monitor the performance of your business to ensure success, taking corrective action and making adjustments if necessary.