Why a lack of planning makes business success so much harder to achieve
Ever competed in a race where you weren’t told where the finish line was? Tried your hand at baking without a recipe book? How about leaving for a holiday without packing your bags? If these all sound ridiculous to you, then let us draw the comparison with a business that doesn’t make plans. Making plans and understanding parameters is so important for business success, but many fledgling businesses have barely planned tomorrow let alone the long term.
When we work with our clients, planning is central to much of our business advice. Having a plan in place is about stability. It’s a reference point from which we can conduct our business. It takes some of the hard thinking out of the day-to-day. Put simply, planning is a good idea!
In this article, we’re going to dive into the topic of planning a bit more, and explain exactly why business success is a much bigger task without a map.
We’re wired to work to goals
Goal setting is our way of putting up barricades between the overwhelming noise of everyday life and business and the things we ourselves want to achieve. When we have decided on a goal or a set of goals that feel right, our entire mindset changes, often subconsciously, to make decisions within the framework of these goals. If we don’t set such objectives, we’re far more susceptible to the ‘noise’ and can make decisions based on things that aren’t good for business, but rather placate someone else. Doing this can wear out business owners and doesn’t get results. Think of goals as ‘setting the rules of the game’, a game that you will benefit from playing. Is your goal to make X amount of money? Great! Is it to retire at 50? Also fine! The goal itself is down to you - but it does need to be set.
Business planning can not happen effectively if you don’t know what the end goal is. No clear or meaningful objectives will usually mean the business plan is based on keeping the business running, not getting the outcomes you want. We work with our clients to dig in deep to understand their motivations and outcomes. Some of these can be highly personal - our job is to help connect these to the activity of the business. Once this is in place, the rest of the planning falls into place much easier.
No plan means you’re only thinking about today
Being present and mindful of the small details in your business is important - it can reflect in the quality of your work delivered to your customer. While making sure your work is as good as it possibly can be every day, you can’t neglect thinking about today in relation to yesterday and tomorrow - that is thinking about continual improvement and longer-term evolutions of the business. Each day there should be at least some mental energy (even if it’s 10 minutes!) spent on where the business is at and what the next move is to make things better.
The easiest way of keeping track of and executing this? A plan!
A business without a strategy is more susceptible to external forces
As we’ve alluded to earlier, a good business plan and framework to execute this are almost like a ‘force field’ against certain things that may happen in your market. The old phrase of ‘staying the course’ is apt in a business where obstacles are almost daily. But how can a business ‘stay the course’ if you don’t know what the ‘course’ is? Your business needs to run from a strategy that’s captured somewhere easily accessible. Over time, your business strategy will become second nature and you’ll recall key parts of it at the times where you need to.
An external force might be something like a competitor making a move in the market, a change in regulations, or the wishes of a potential client. These forces to an unsure business can knock it off its axis, with desperate scrambles required to accommodate or compensate for these events. A good business strategy should protect and guide your business through these occurrences - has that potential customer disqualified themselves from working with you? Does that competitor’s new product really have any impact on your strategy? Do you need to update part of your process to stay compliant and remain on track to achieve your business objectives?
When the strategy and plan isn’t in place, there’s nothing to reference these outside forces against. Your strategy and plans are malleable however; if there’s a better way to achieve success by changing elements of the strategy then by all means explore this.
When times are tough, a business plan can be your guiding light back
Tough times in business affect all business owners. There’s just no way to go through life without these. Sometimes in a cruel twist of fate, we can encounter multiple things happening at once such as losing key staff, losing a client, and having to pay a large bill. It’s totally normal in these low moments to lose some confidence - any business owner can be forgiven for having thoughts of whether they should or want to be in business still. Luckily, these moments are often passing, but they’re hard.
When you have a clear sense of what the business is and where it needs to go, these tough periods are easier to look at with more perspective as the roadblocks they are and nothing more. The business plan will ideally have set out some milestones and objectives to keep you motivated and focused on the right things. Business owners are usually natural problem solvers, or fast become this, so adversity should be just another component of the business ownership journey.
A plan can help to determine key milestones in between today and your end goal
Goals are often big and lofty. They may not be visible in the business today in any discernible way. To keep you and your team engaged with the mission towards these goals, it’s important to set out milestones along the way. Business planning should define what these milestones are. The initiatives within the business to achieve goals will be based upon activity to hit certain milestones - be it a revenue goal, offering development, or anything else.
Achieving a business goal is often a matter of reverse engineering the outcome, back through milestones and delivery activity. How the goal is achieved may change (such as the way a certain monthly revenue average is obtained, through either customer numbers or average sale value), but the result itself should be reasonably stable with the right planning.
You will struggle to lead a team towards success
While your team may be mostly focused on earning a living and their own career growth, these personal goals will be enabled by the business working towards its own ones. If there’s not been a plan in place on how the business will grow and improve, setting personal KPIs and goals can be nigh on impossible. Your team’s objectives should directly translate to value add for the business, so without a measure of what value looks like this makes it hard to keep your team engaged.
Beyond the individual level, communication with a team is vitally important. Reinforcing the purpose of the business builds trust and motivation. A common mistake businesses make is keeping the objectives of the business a mystery or even guarded secret. It’s no surprise therefore that these businesses struggle to keep their team focused on the right things. Being transparent on company objectives with your people helps everyone.
A directionless business is not enjoyable to work in
When the business doesn’t have a plan, it’s not just the business owner who can start to feel like the job is getting through the day. When the company feels rudderless, it doesn’t take long for your staff to feel the same way. And with job satisfaction for many staff having as much to do with purpose as the pay, it’s a good way to lose great people.
Get started with a business plan
So, how would a business get a plan in place that can prevent some of these issues from arising? Here are some basics to get you started:
Start with a vision for your business
Before any complexities are worked through as to the ‘how’, you need to allow yourself to dream big and imagine what your business’ ideal state might look like. Creating a vision may require some brainstorming to get the most refined version of the business’ future state. In any case, the vision should be captured somewhere in writing - you may even wish to have it on your website to hold yourself accountable to your existing and future customers.
What is your business doing at its best? Craft a 1-2 sentence statement that encapsulates this. Then, you can start creating goals that need to be realised to achieve this vision.
Goals might cover things like:
- Customer numbers
- Geographical locations you serve
- Industries you sell to
- Social good
The goals are up to you but should speak to the wider vision of the business.
Work backward from your goals to create your plan outline
With goals in place, you can start to build a business plan from a practical standpoint. What does the business need to do to get from today to the vision? This can become quite granular and that’s okay. The idea here is that each of your goals has an outlined plan to achieve them.
Consider how each phase of your plan impacts the next
In projects there’s the concept of ‘dependencies’; meaning that to start a particular phase of work, the previous phase needs to be completed. Your business plan should include requirements and dependencies to achieve each of the goals - while these might not all be linear, you’ll at least want to surface the ‘must haves’ for each stage of the plan - this will come in handy later when prioritising activity in the business. These factors may change over time, but your initial business plan will benefit from having such considerations added in.
Have contingency and continuity covered in your plan
If the last few years have taught us anything in business, it’s the need for adaptability and plan Bs. Consider incorporating contingency plans now so that in the event the landscape changes, you’ve already done some of the mental load on how you’ll make changes to compensate.
Phase 1 needs the most detail
No one in business has a crystal ball. The best laid plans can change. In your business planning, you need to make sure that the next 3 months are closely planned, the next 6 months are reasonably well laid out, and so on. Your 5-year plan might resemble a strategic and objectives based description.
Short term = get practical, long term = think strategic.
The business plan is not a one and done artefact
Your business plan is a living, breathing document. It shouldn’t be written and filed away but referred to on a monthly basis at the absolute minimum. As the business evolves and grows, you can adjust elements of the plan for the good of the business's long-term success. The plan itself should be distilled down into an action-focused register where key measures are easily visualised and edited. A shared cloud-based sheet is one good format, or a planning SaaS product may be more to your liking.
If you need some help building or updating your business plan, chat to RightWay. Our Business Partners have been there and done that for years, lending this experience to you and your business.
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