Planning is Essential –
But What Plan?
Do you have a plan for your
business? I do not mean an annual financial budget
although having trained initially as an accountant I
cannot deny that a budget is essential to the
efficient management of any business. I cannot help
feeling however that a budget alone will not take
you where you wish to go. I have been involved in
the preparation of many budgets and seen the same
scenario played out a number of times.
I feel sure you know what I mean. The budget is
made far too ambitious. Profits start to fall behind
budget and steps have to be taken to correct the
situation. The easy thing to do is to cut costs and
the easy costs to cut are always training and
marketing. I must confess that I have always
considered this to be strange behaviour because
training and marketing are required to move the
business forward.
I think that marketing is an easy cut because
companies do not measure the effectiveness of
marketing. If management realised exactly how much
new business was obtained from their marketing
effort they would know what marketing to cut and
what to increase. But I digress from the main point
of today's newsletter.
Apart from a budget three other plans are
necessary. Yes I know it takes long enough to do the
budget without having to do three more plans but
please bear with me on this. In order to move your
business forward you need three plans that tell you:
WHERE, HOW and the IMPACT. The three plans are:
A Business Plan
This plan should deal with where you are going and
why. This plan provides the overall direction for
the business. Where are you going over the next
three, five and ten years. If no one in your
business knows where you are going how are you going
to get there? Do not keep this information to
yourself, let your management team know what they
are supposed to be achieving. Try sharing it with
management and staff key customers and suppliers.
An Operating Plan
How are you going to get to where you
wish to go? What do you have to do? Do you need new
staff, new equipment, new offices? If you do not
know what has to be done in order to reach your
goals then you are very unlikely to succeed. Once
again involve others in this plan. The preparation
of this plan will be far more effective if more,
rather than fewer minds input ideas into it.
A Change Plan
As your business develops it will inevitably have to
change. If it is not changing then you are not going
anywhere. How are you going to manage that change?
Someone has to manage the change and smooth the
path. That someone is you.
So the question you have to ask is "Do I have a
plan?"
Is the plan effective, when was it last reviewed
and is it used as the basis for action?
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