By Eugene E. Valdez
In my opinion, even in a “good economy”, for a small business owner to be successful, it is essential that he or she master the art of planning. In a challenged economy like the current one, it is even more crucial. How do you become a good planner? By doing it a lot. Plunge in, make errors and get better over time. The key is to engage in planning all the time and make sure that your plan is always written down, not outlined in your head. Look at your written plan EVERY DAY.
The art of planning is the ability to draft business goals, carefully select a strategy or strategies to achieve those desired goals, the discipline to implement those strategies and the focus to monitor their effectiveness. If the selected strategies are not leading to the desired goals it is critical that they be modified or “tweaked” as soon as possible. Sometimes it takes a lot of courage to admit “that my plan is not working”… and it needs to be changed.
Variables that could undermine the effectiveness of your strategies are numerous and could be both internal and external to your business. One of the hallmarks of good planners is that they are very observant of these variables. Some of these variables could include but not be limited to the following:
Competitive landscape: How many new competitors have entered my industry? What seems to be their strategy to “win” business?
Customer buying habits: Are my customer buying habits changing?
Government Regulation: Is there any new legislation pending that could impact my business?
Employee morale: What is its current status? Is it working for or against me?
Management Depth- Is my management team’s expertise improving?
Financial Resources: What is the current status? Are they holding me back?
As was stated earlier, the business owner’s master plan for success should be a written, “live report”. Many people call this master plan a “Business Plan”, I call it a “Success Plan”. Call it what you want, just do one, even if it is but a few pages and constantly update it. The composition of your master “Success Plan” is a series of “mini plans”.
Here are my “mini plan” suggestions:
- Management Plan
- Product or Service Plan
- Marketing / Sales Plan
- Operational Plan
- Financial Plan
Who are or should be my key managers? What are or should be their job responsibilities? What should I focus my time on? Who are my current advisors and are they effective? (i.e., CPA, Banker, Attorney, etc.)
Product or Service Plan:
What is the current figuration of my offered products or services? What is selling what is not? Is it time for a new entry to my mix? What is my current pricing strategy, should it be modified?
Marketing & Sales Plan:
Who are my current competitors? What do we do better than them? What are the current demographics and psychographics of my customers? Why do they buy from us? Should I sell my products using company employees, independent contractors or should I do it?
How are my current policies, procedures, systems and team performing to get the work out? Can I tweak it to make it less costly or efficient? How is my quality control doing? Do I have enough equipment and plant space? Should I sub out some of my work?
Do I have enough financial resources in place, be it my equity capital or bank loans and lines? Do I need to restructure my business finances? What is the current cost of my capital? Are my finance and accounting reporting systems effective in helping us manage cash flow daily?
Each of these mini plans should have their own set of goals and strategies and status reports to determine if the created strategies are working. If all mini plans are “clicking on all cylinders “you will be one happy business owner and a more confident planner for next year’s planning exercise.
Eugene E. Valdez is the founder and owner of THE CEO TEACHERS an executive coaching/business finance consulting company specializing in the needs of Inland Valley CEOs. Mr. Valdez can be reached at 909-230-0024, email@example.com. Mr. Valdez welcomes any questions from the IE CEO community.