PLAN, PLAN AND PLAN SOME MORE
While December is a busy time it is essential to make time to make a plan so you can go into 2017 with a driving focus. I love planning. There is nothing better than sitting down with the key people in your business and discussing where you want to take the business and how you are going to get there.
If this doesn’t excite you then why are you doing what you are doing? If it doesn’t excite you, either change your business design or start a new business…
The most important document I have in my business is our One Page Business Plan. I was introduced to the document from my accountant coach, Rob Nixon. Verne Harnish, the CEO of Gazelles came up with the idea. Gone are the days of a 50-page business plan. A plan should be easy to read and gets straight to the point.
A true planning process maps out the following items for you:
Shows you where you are now;
Shows you where you want to go;
Shows you how you are going to get there.
So where do you start? It always starts with your purpose and core values.
Your Purpose - Have you ever written down why you are in the business you are in? What keeps you waking up in the morning and heading to work? Sure money is a factor, but I believe there needs to be something else. For me, being a business accountant is one of the most fulfilling jobs going around. I love helping my clients achieve their goals – both financial goals and non-financial!
Your Core Values - setting your business’s core values is one of the most rewarding exercises I have done. Once you have these on paper and embedded in your business, any team member can make a decision for the business – it just needs to be in line with your core values.
Now you have your purpose and core values down on paper, now you can discuss the financial side of your business.
Where are you now and where do you want to go. Go through and summarise the following:
Total gross profit
Total net profit
Make sure your starting position is accurate. Gone are the days of waiting 6 months until your accountant has reconciled your financial statements so you can lodge your tax return before you get the results of the performance of your business. You need numbers now and accurate numbers.
Extrapolate these numbers out from today to 3 years, then work your way back to 1 year and 90 days. Don’t think about how you are going to achieve the numbers. Think about what you want them to look like. The how and detail comes later.
Many businesses plan by simply taking last years’ revenue, costs and profit and adding a percentage, say 10% each year. They then adopt this as their ‘budget’ and simply proceed on with the running of their business. They miss the importance of this step. If you set a target, you can always brainstorm ideas on how to achieve the target, guaranteed. Execution of these ideas then becomes key. Therefore, planning your future numbers is the key step in determining what you are going to need to achieve to keep moving forward.
Once you find out where you want to take your business financially, you need to brainstorm the key actions that you need to do to achieve these numbers. That is, the top 4-5 things you need to accomplish to hit the numbers. Again, like you did with your financial targets, start with 3 years, 1 year then your next 90 days targets.
Once you have completed these steps, you have your goals of where you want to take the business, you have the key actions you need to achieve to get to your goals, all you need to do now is to take action and tick the actions off your list. This is where accountability becomes key.
Why do we all have Personal Trainers even though we know how to train? You got it, its to keep us accountable. The likelihood of waking up early in Winter is dramatically increased when you have a Personal Trainer. No one wants to call in sick. No one wants to let down their trainer. Therefore, if you need a personal trainer to keep you active, why would business be any different? You and your business needs an accountability coach.
One important thing to note here is you need to regularly report on your numbers, whatever they be. You need to make sure they are accurate so you know exactly how you are travelling. What is the point of a speedo on your car dashboard if it tells you a week after speeding or it tells you the wrong number?