Do you remember when there were public pay phones on almost every street corner? When was the last time you sent something via fax machine? How about the last time you referenced your business plan? Business plan? Isn’t that also from the 20th century? The short answer is “yes” and “no.”
The old version of a business plan meant putting together a document that ranged from five to 50 pages and dealt with everything that could possibly come up in the first few years of a company’s existence. It was shown to bankers and potential investors to help raise capital for the business. Eventually, the plan was shoved into a filing cabinet never to see the light of day again.
Today, business plans are more like “GPS” plans. Written correctly, a business plan should act as a living, breathing document that helps the business owner and his/her team navigate uncharted waters. Think about how you use your smartphone for directions. You plug in a specific address and then get step by step directions on how to get from where you are to where you want to go. If there is congestion or lots of traffic, the smartphone might provide an alternate route to assist you in arriving on time.
Here are three ways to turn your business plan into a GPS plan.
1) Select a Specific Goal: Most companies usually pick a revenue number as their specific goal. It could also be the number of new accounts or a measurable increase in market share. If you are working on your GPS plan for 2016, the number should reflect your annual goal.
2) Create a GPS Plan: The same way your smartphone gives you step-by-step directions to a specific address, your GPS business plan should provide specific steps in order to get from where you are on January 1st to where you want to be on December 31st. For example, if you did $750,000 in revenue in 2015 and your goal is $1 million in 2016, the GPS plan should show you exactly how you plan to increase revenue by 33% next year. The more specific your plan, the better your chances are for success.
You should also take into consideration lost business for next year. If you typically lose $100k in sales each year (accounts go to your competitor or out of business), then you really need to budget for $350,000 in new revenue. How much will come from existing accounts? How much will be new business? Where will the new business come from? What support measures do you need to take (e.g. marketing, hiring new salespeople) in order to achieve your goals?
3) Create a Backup Plan: Every New Year starts with the best intentions. We create resolutions and promise that “this will be our year!” Unfortunately, most resolutions don’t make it past the first month. In business, most companies don’t have the luxury of flying by the seat of their pants. If you lose a big account in January, you need to have a plan in place to replace the lost revenue. Make sure that your business is protected by small business insurance. You also need to watch expenses, and make adjustments, while you work on bringing in new sales. If you have a business contingency plan in place, then you won’t panic when something bad happens and make a bad situation worse. Your backup plan will allow you to rebound and continue on towards your specific, annual goal.
There are too many twists and turns on the road to success in business today. Don’t make achieving your goals harder by not having a GPS plan in place. You should also schedule regular meetings every month to review the plan with key members of your team. Take the time to do things right, and you won’t have to do them over. Happy driving!
As the Founder & CEO of Brian Moran & Associates, Brian is dedicated to helping entrepreneurs run better businesses. Brian has been named one of the top 100 SMB Influencers in the country by Small Business Trends & Small Biz Technology. For more information, visit his company website www.SmallBusinessEdge.com.