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Are You Doing the Right Planning For Your Small Business?
Are you planning your planning?
Many business owners I talk to don’t – in fact often don’t have any plan at all! These are companies that stagger from crisis to crisis, taking the amounts in their bank account as an accurate reflection of how they are doing. Planning is something they never really have time for. Other business owners who have a written business plan keep them safe in a filing cabinet where they rarely, if ever, see the light of day.
In today’s uncertain business times, failure to plan is actually planning to fail. And regularly reviewing plans is an essential check to ensure we can respond quickly to changes as they happen. I would like to suggest that you set aside at least half a day every month to plan the future of your business. Make an appointment in your diary, switch your phone to voicemail; turn off all email and text alerts. This is important!
Your plans don’t have to be fancy, but writing them down will make your future seem real. You will have goals to work towards and goals to measure against. Monthly reviews will highlight any problem areas and allow you to make adjustments and take corrective action quickly, if needed.
How do you plan meetings?
When work settles down a bit, it can be a welcome relief to write something in the journal! You’ll probably meet fellow business owners for coffee or lunch and feel like you’re working hard. But your time, especially if you’re a one-person business, is the most important asset you have. You can’t afford to splurge or splurge on anything that doesn’t bring you money. And even when you manage to keep meetings short, if they involve travel, that’s essentially ‘dead’ time that you won’t earn anything from.
Now look at your diary. Do you have meetings planned? Will it earn you right away (i.e. meeting with clients) or very soon? Do any of them fall into the ‘maybe one day’ category?
While I’m all for building relationships for the future, meetings can be incredibly time-consuming. When you take the time to plan before the deal, your time will be well spent. For example, it’s hard for me to focus on other work if I know I have a meeting later in the day. A solution that works for me is grouping meetings on the same day.
Working with a client last year, I was dismayed to discover that he had no budget control, no cash flow projections, and no capital purchase planning. His business was not insignificant either, with 9 employees and almost £1/2 million in turnover. However, his large overdraft and the associated bank and interest charges did not surprise me.
This is a good example of how not planning the finances in your business can result in literally throwing money down the drain. Planning ahead to replace outdated equipment avoids the panic of finding funds when it finally stops working.
Planning an annual marketing budget will prevent you from being swayed by seemingly overwhelming special offers that you really can’t afford. Or, on the other hand, be in a position to take advantage of low prices because you know you have the funds available. Planning your cash flow projections means you’ll be able to quickly see if a shortfall is coming, before it happens, and give you time to do something about it.
6 hidden dangers of planning
Although planning is an essential step towards success, there are also a few dangers to be aware of!
Planning to the nth degree. This is when you write your plans down to such minute detail that there is no room for maneuver. Your plan must include some contingency time to allow for the unexpected – because it will happen.
Back into a corner. While planning is a good thing and helps you stay on track, if you don’t notice when adjustments are needed, you’ll end up in a corner with no easy way out. Take a step back from time to time and check if you are still on track to achieve your desired result.
Operation with turn signals on. Not quite the same as the previous two, this is when you are so focused on what you have planned that you are oblivious to new opportunities that may come your way. It would be a shame to miss something good because you were too busy to see it.
Planning without taking action. Unfortunately, this happens to many people (in business and in private life). They get confused with planning and never actually get around to putting their beautifully designed plans into practice. Then they wonder why nothing has changed. Don’t let it be you.
Allow others to plan for you. Although this is fortunately rare in business, it’s still worth checking to make sure that what you’re planning is actually what you want to do and achieve, and not what someone else has decided might be a good idea for you.
Planning to look good. Don’t plan to do something because you think you should or because you want to look good to others. Unless you plan for what you really want and those plans are in line with your personal inner values, you will have a hard time making progress with them and you will not enjoy the journey.
I hope this article has encouraged you to start writing your small business plans – while being aware of the potential pitfalls!
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