Cream of the Crop features a rotating panel from the Harvest Group, a landscape business consulting company.
Most of us who have owned a business find ourselves running as hard and fast as we can just to keep up. As the business grows, it becomes more complex. And before you know it – the business is running us.
As E-Myth author Michael Gerber reminds us, it is critical that we work “on” our business instead of “in” it. Which means taking the time to sit in the pilot seat, checking that all systems are functioning properly and that we are flying toward our objective.
Now is the time of year to start thinking about creating a plan for the coming year.
Business planning answers these three primary questions:
- Current Reality – Where are we today?
- Goals – Where do we want to be in the future?
- Action Plan – How are we going to get there?
However, before you can dive into the deep end of the business planning pool you need to do some homework. This process can be divided into three steps that will prepare you to develop an actionable business plan for the upcoming year.
1. Know Your People.
Success in any organization depends on setting clear expectations and goals. To ensure that everyone in your organization is clear about the road ahead and what’s expected of them along the way, it’s critical that everyone – including the leaders – are able to answer these six questions:
- What am I supposed to be doing?
- What are the expected goals or standards?
- How does my performance match up to these goals?
- What do I need to learn or do to improve?
- What can I expect if I am successful?
- What happens if/when I fall short?
Present these questions to the key leaders and managers in your company and ask them to answer them in writing.
2. Know Your Clients.
Another aspect of information gathering is to survey your clients. These should be conducted at least once per year on all jobs and as often as once per quarter for key high potential jobs or jobs that have recently been started up.
Sample Survey Questions:
- What is your current level of satisfaction 1-5?
- What do we need to do to make it a 5?
- What would you like to see us do more of? How about less of?
3. Know Your Business.
You need to determine the current stage of development or maturity of your organization. Small businesses can generally be broken down into five basic levels or phases of existence.
Stage I: Existence. The organization is a simple one – the owner does everything and directly supervises subordinates who should be of at least average competence. Systems and formal planning are minimal to nonexistent.
Stage II: Survival. The organization is still simple. The company may have a limited number of employees supervised by a production manager. The PM is not a decision maker, but instead carries out the rather well-defined orders of the owner. Systems development is minimal.
Stage III: Success. Organizationally, the company has grown large enough to require functional managers to take over certain duties performed by the owner. Basic financial, marketing and production systems are in place. Planning in the form of operational budgets exists. The owner and the company’s managers should be monitoring a strategy to maintain the status quo.
Stage IV: Take-off. The organization is departmentalized. The key managers are competent to handle a growing and complex business environment. The systems are becoming more refined and extensive. Some operational planning is being done. The company is still dominated by the owner’s presence.
Stage V: Resource Maturity. The company has now arrived. It has the advantages of size, financial resources and managerial talent. If it can preserve its entrepreneurial spirit, it will be a formidable force in the market.
Now that you are armed with these components, you can begin to create an effective plan for next year.