… and what to do about it
Righto, so I hope you have forgiven me for saying that your strategy sucks? I’ve made an assumption that you have.
In any case, it wasn’t specifically directed at you and it wasn’t an assessment of your strategy – it was really just to make you think – “well, maybe it does….does it?”
And the uncomfortable truth is that if you’re not getting what you want out of your business, then something does suck!
And if it’s not your strategy, maybe it’s your business planning?
Here’s where business planning often falls apart:
1. Lack of expertise
I’ll use the numbers as an example (a ‘home game’ for me).
Do you actually know how to pull together a dynamic 3-way model that tells you how you will perform over the next 3-5 years? One that tells you if you are going to run out of cash if you execute your plan?
And can you convert that into an executable plan to which you can hold your team responsible? If not, you’re at a disadvantage already.
Now, that’s just one example to illustrate a point. But hopefully you get the point already. You are one person and whilst you know what you know, I don’t know what you know but I know that you can’t know it all and neither can I! Pull a team together around you to complement your strengths.
2. Reluctance to get help
Just ask for help. Even if you know how to build a financial model, lay out a factory to achieve world-class efficiencies, create a lot of noise in the marketplace – is that the best use of your time?
Is there someone else that is better placed than you to do that piece of work? Someone who has more time to allocate to this, the planning phase?
I mean, you could clean the dunnies too, but you’ve got people for that. Right?
3. Lack of rigour
Small business owners are men and women of action. And damn it, they want action. Time spent planning is time not spent doing. And we could spend the rest of our life planning…..
So, we cut corners because we’re bored by the detail. We know the plan already. Big picture, anyway. It’s our strategy after all.
But what’s missing is the detail which means that we miss things and we fail to execute because we can’t communicate the plan to anyone else – in sufficient detail – that they can carry it out to our satisfaction.
Hmmm, execution – more about that in the next edition.
4. Lack of a framework to work with
You’ve all read about SMART goals. That’s a framework for thinking about how to set goals and giving them a greater chance of being achieved. Well, they work in the minutiae of planning too.
Ensuring your goals are Specific, Measurable, Achievable, Realistic and Time-based means you’ll know when they have (or haven’t) been completed.
Do the elements of your planning actually work together? Or are they at odds with one another? Are you saying, for example, that you’re going to build a war chest of cash using accumulated profits but you’re also planning to spend up on staffing up and marketing the business? Well, unless you explain how you are planning to join those two things together, there is a ‘disconnect’ and that threatens to undermine the integrity of the plan and the confidence of those charged with executing it.
6. Failure to identify hurdles
Bloody hell, it’s not a university assignment. This is the real world. Stuff happens! No matter how conservative you reckon you are being in the planning phase, there will almost always be time lags, cost over-runs and other realities that threaten to interrupt your dreams. Have you spent enough time with the reality goggles on?
What are those hurdles in your case, and have you accounted for them in your planning? Can they be overcome and how? Do you need more time, more people, more cash?
For example, if you’re relying on bank lending, what makes you think you’ll get it? Do you know what the approval process is? Do you know what the covenants will be? Will you need to make adjustments to ensure you clear those hurdles?
7. The human factor
Unless you’re a ‘one-man band’ you need to execute through others. That means that you need to motivate them to change. You need to articulate where you’re headed, what their role is in that and why their role is important. If you don’t perceive that, you won’t plan for that – and if you don’t develop the story, tell the story and allow time for change to become reality in their world, you WILL NOT execute.
If you’ve reached this point and forgiven me (again) for being blunt, you’ve probably recognised that your planning does need an overhaul.
Call us on 1300 656 141 to see how we can help you to develop or tweak your business plan.