January has all but flown by, but it’s not too late to plan for the year ahead. The Adviser shows you how to get started on your business plan for 2013
INSANITY, ALBERT EINSTEIN is believed to have said, means doing the same thing over and over again and expecting a different result.
It’s a trap into which small businesses can easily fall.
Brokers and other small business operators are, more often than not, kept busy working to ensure all the day-to-day things get done properly. The idea of allocating time to planning for the future of the business sounds like a luxury that will ‘hopefully’ happen at ‘some stage’.
It is, however, precisely this attitude that can make the day-to-day more difficult.
FrontRunner Consulting’s Doug Mathlin says while people will meticulously plan their holidays, from the location down to an itinerary, activities and budget, when it comes to their lives – and sometimes their businesses – we’re far more likely to just hope for the best.
This, according to Mr Mathlin, is not sufficient.
“Hope is not a strategy,” he says, “and if you don’t have a plan, you’re just hoping that your business works.”
If it has been successful without your planning, it can be particularly difficult to decide to sit down and think about what could, should and would happen.
Mr Mathlin, however, says that any meaningful change and sustainable growth needs to be planned for.
“If you don’t know where you’re going, anywhere’s fine,” he says.
Indeed, ‘inspirational’ quotes about the importance of planning, and the impending failure that comes when you don’t, are two a penny: ‘By failing to prepare, you are preparing to fail’; ‘A goal without a plan is just a wish’; ‘If you don’t know where you’re going, you’ll end up someplace else’ and so on.
Some will find such statements inspirational; others will find them intimidating. Mr Mathlin, however, says business planning need not be an onerous or daunting task.
STEP 1: ASK YOURSELF ‘WHY?’
According to Mr Mathlin, the first step in business planning is to ask yourself questions – and to make sure you know the answers.
You need to ask and identify the answers to questions such as:
According to Mr Mathlin, business planning is also intrinsically linked to ‘the bigger picture’ and what you’d like to be doing outside work.
“You could be trying to achieve more time with family, which seems simple enough, but you still need to plan for how you’re going to get there,” he says.
The process of identifying why you’re doing what you’re doing helps you to remember the purpose of your business.
Understanding these motivations also makes it easier when you need to decide how you’re going to achieve some of your specific goals.
STEP 2: BUSINESS VISION AND THE BIGGER PICTURE
Next, you need to identify your vision for your business.
That vision should consider the next three to five years.
“The vision should identify what you want the business to look like in three to five years’ time in terms of staff numbers, loan book size, products and services offered, your role within the business and what you’d like to be doing that you aren’t already doing today,” Mr Mathlin says.
If you look beyond the immediate future, it will be easier to see how you will get there, he adds. Specifics and measureable targets will ensure there is a greater chance of success.
Simple plans such as ‘continue what I’m doing but increase it by 10 per cent’ don’t cover all areas of your business, and don’t identify steps or processes.
“That’s too rudimentary and not very valuable,” Mr Mathlin says. “You’re not actually identifying action plans.”
STEP 3: GOALS AND DETAILS
The next step is about breaking down your long-term goal into achievable milestones for the year ahead.
“So once I know why I’m doing this and have confirmed the fact that I still want to do it and I’ve identified where I want to be in three to five years, then I can get really specific," Mr Mathlin says.
“What have I got to do by the end of 2013 to be on track for what I want to achieve in three to five years? What have I got to do to be one third of the way there?”
Goal setting needs to be specific and detailed. Brokers should be identifying factors such as:
It’s also important to have more than one key performance indicator (KPI) for your goal to make sure it’s realistic, achievable and measurable.
“If your goal is to write $30 million worth of business, a better goal is probably about how much your loan book can potentially grow,” Mr Mathlin says.
“For some people, writing $30 million means a net $10 million increase in their book. If people really thought about and understood this, they may want $20 million growth instead, which changes the parameters of the plan.
“Whatever the goal is, you need to be really specific about it and have more than one KPI or measure around it.”
STEP 4: 2013 V 2012 – WHAT’S THE DIFFERENCE?
Next, you will need to identify what you’re going to have to do in 2013 that you haven’t already done in 2012. To get a new result, you may have to add new processes, or improve the ones you already have.
“What we’re trying to avoid here is just going through the motions and doing the same stuff that we did last year while hoping for a different result,” Mr Mathlin says.
“The challenge is to actually document the things you need to do. It could be about the number of referral relationships. It could be about better marketing, communication and client care. It could be about different customer engagement processes when you’re face-to-face with new customers.
“The more specific you are with the plan, the better chance you have of actually implementing it.”
STEP 5: VISIBILITY
“The business plan should be a road map for success for the next year,” Mr Mathlin says – and as such, it needs to be visible and accessible throughout the year.
It should be visible on your computer or pinned up in your work station. “It should always be in front of you so you can’t get away from what you’re trying to achieve,” he adds.
You should also make appointments with yourself to review the plan. Is it on track? Does it need tweaking due to market conditions or new goals and parameters?
“The good thing about being a small business owner is that you can be nimble and you can change,” Mr Mathlin says. “You can slightly amend your plan to make sure you’ve got a better chance of meeting your goal.”
The planning activity should take about two hours overall, he says – so it’s probably time to get writing.
The industry will need to self-regulate in order to standardise t...
The major bank’s CEO, Matt Comyn, told the AGM that there is an...
The mutual bank has announced reductions of between 10 and 25 bas...