Having a business plan is important.
But without a process of measurement, review and accountability, I would say it’s a COMPLETE waste of time.
Your plan contains the goals you want to achieve.
But preparing a business plan is the first step, its what follows that will determine success or failure of that plan.
I’ve worked in organisations where the annual business plan is a big thing, months of preparation, then its issued and guess what…
…it sits in the corner of offices, at the back of a drawer, in a filing cabinet…
…and isn’t looked at again, until maybe the same time next year when the process starts all over again.
Measure business performance
What is crucial is that you measure performance against the plan on a regular basis, this could include weekly, monthly and quarterly metrics. Sales enquiries, conversions and levels of new business each month.
Gross profit percentages, overhead levels, jobs completed, productivity levels.
You need to measure actual performance to identify changes you need to make.
Review the plan and make changes
By measuring performance, you can identify where targets are or are not being achieved and you adjust these targets and most importantly the processes accordingly.
Focus on the process not the end goal
The goal – the target does not determine success or failure of the plan, it’s the process you follow to get there.
This is a part that is often, not completely overlooked, but sits in the shadow of the goal.
“Our goals in to increase sales by 20% this year”
Ok – great, but how are you going to do that?
This is the process you need to follow, the system you will implement, the actions you will take to achieve the goal.
Measure, review, adjust, improve the processes and you’re far more likely to achieve your goals
Are your goals meaningful?
Let’s stop for a minute and think about that goal – “to increase sales by 20%”.
Does that mean a 17% increase in sales is a failure?
And what does a 17 or 20% increase in sales look like?
Wouldn’t a goal based on number of new customers, increase in revenue per existing customer, number of new products introduced be a better measure?
…And then focus on the process
So, if your new goal is to get more customers or increase revenue per customer which is far more relevant.
You can then put in place processes to achieve those goals, it could be number of sales calls per week, number of email subscribers, follow up contact to customers who bought previously.
The questioning of your goals, your measurement and review process is a vital part of the whole planning and implementation process.
Accountability is key
When you’re involved in your business on a day to day basis you are often so close to the business that its difficult to review performance objectively.
You need input from someone independent, to question what you’re doing and to hold you accountable to doing what you say you will do.
It’s very easy to skip a part of the process if you get ‘too busy’. But being held accountable to this means its less likely to occur in the first place and then also less likely to be repeated.
This is a vital part of the process of preparing, measuring, reviewing and implementing of your business plan. Being held accountable means you are more likely to complete your processes or actions and ultimately achieve your goals and your business plan.
If you would like to find out how we work with business owners to enable them to achieve their goals, please get in touch.