Recommending a business plans is often a starting point for many advisors and consultants. The challenge is that there are nearly as many recommendations on how to do a plan as their are advisors and consultants.
The single biggest issue with planning is the horizon. Many suggest a 3-5 year plan. If and when that gets done, the plan sits on the shelf in most cases.
I developed my consulting program specifically for the purpose of guiding companies on how to achieve extraordinary revenue and profit growth in a short period of time. Clients are taught to think in 12 month chunks and then roll that back to what has to be done this week to achieve it.
When you bring your targets, to what has to happen today, this week, this month that are required to achieve the 12 month goal and hold people accountable for achieving those interim results, amazing things happen.
In the process of doing this, a company must address what could derail the results. So the point of considering disasters is addressed, but you get there from a different direction. In my experience the top two potential disasters are sudden loss of a key person where there has been little or no backup planning and a company relying a great deal on one or a small number of customers for most of their business.
Exceptions:
Most of the time companies need to think in terms of how what is being accomplished today moves them closer to the goals they have established for twelve months out. In fact most of my work has been to show companies how to install and implement this discipline along with supporting processes of accountability.
There are some situations when longer term planning is required. These include companies where capital spending for equipment and possibly additional facilities is important. For the majority of businesses, negotiating financing or buying a company will require three to five year plans. Lenders will insist on it. While on that topic, there is always money for a good deal…always.
Summary:
Most of the time a business plan should be what you are intending for all in the business to be accomplishing in a reasonalbe time period. Again I usually think in terms of about a year and that year is always rolling. There must be some provision in the case of a sudden loss that would have a major impact.
As for the plan itself, I have found most companies do not challenge themselves to achieve their potential. Often the discussion is along the lines of “well our growth rate this year will be about 5% because that is what we seem to be able to do in times like this” I always ask the what if questions. What if the revenue and profit target was a growth rate of 30% in the next 90 days? How would you do that?
It is interesting what happens when you start asking for ideas…you get them.
Sharing with all my readers the energy of peace, happiness and abundance
Steve Pohlit
The Profit Expert
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I think that taking the business planning stage, into smaller chunks, can really help new businesses to better get an idea of where they are going and get on with going there.
Looking at a 12 month period makes it a lot more realistic. In 12 months you can see that far ahead. What you are looking to achieve is not that huge or that far out there. Even though it can be, there is not really a limit.
When you take it to 3 or 5 years out, you are looking at some fairly big numbers that are generally much bigger then you can really comprehend when you are currently sitting at zero.