Strategic Planning For Business


2009/04/21

Business Planning For the Strategically Challenged

Category: Strategic Planning For Business – Author: admin – 9:25 pm

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The Business Planning Ladder

A traditional business plan (where you examine markets, figures and the likelihood of profit) is something that all business owners should do. It makes you consider the nitty-gritty of your business. Having said that I filed my plan away the day I wrote it. There are many people who have no plan at all. How disastrous is that?

I find the traditional business plan fairly limiting. It’s like putting a really tight hat on and squeezing all the thinking juice out of my brain. I look at it and go blank and it’s not something I use to drive my business. It’s more like an atlas when what you need is a street directory. What I want in a business plan is a map that leads me to my goal in a way that I can use easily, quickly and regularly. I want one that I can adapt on the run and that shows me new opportunities.

There are lots of ways to do a business plan. I have seen a collage of pictures. It didn’t mean anything to me but was enough for the business operator to follow as she went along. Each picture represented something that she needed to achieve on the way to her goals. Let me show you a great tool that you can adapt to suit yourself. I call it a ‘business plan ladder.’ It’s the ladder to your success.

One warning - this will not suit traditionalists or people who love specifics. This is perfect for the visual, seat-of-the-pants business person so decide which of these you are before you read on. A successful business will go through stages of growth, expansion and recruitment. The ladder is designed to reflect those stages. By identifying the major stages the rungs of the ladder offer a blue print for you and your business.

The Ladder.

At the bottom is the start. What is your idea? Why do you want to do this? Where are you now? Get it clear in your head before you do anything else.

Stage 1 Products/Services

This is all about getting started.  Exactly what will I do or sell? Who is my supplier? How much do I want to make? It is important to set yourself a profit or turnover target so that you can see how you are going.   You are deciding who your customers will be and where to find them. Should you have a website or open a shop? Let me have a go and see how it works. This is a time of shaping your business. It is about getting a firm foot hold on the rung before taking any risks climbing to the next. It may be the hardest step that you take.

Stage 2    Increase the business
By now you will be actively running the business. You will have reached your first sales target so you know that what you are doing is working. Now is the time to start increasing your targets or expanding your market. How will you do this? What options do you have? Where can you look for new customers? Are there better ways to do what you have been doing? You have proven that the idea works, now it is time to really boost the business.

Stage 3.    Recruit.
By now you will have enough work coming in to keep you busy so it is time to look for someone to help you. How many people do you need? What jobs will they be doing?   What changes do you need to make to accommodate them? Can you afford them? This is time of consolidation rather than expansion.

Stage 4.   Move to larger premises.
At some stage now that the business is thriving and you have staff, you are likely to need new offices or a warehouse. You have decent sales and good staff. Will you need more staff at the new shop? Will you need new equipment? What impact will it have on staff?

You will probably find that you move through stages 3 and 4 a couple of times depending on the type of business you have and how big you want your business to be.

Stage 5    Moving on.
The business is running itself, with the help of great staff. Do you hire a manager and find something new to do? Do you sell the business and retire? What is your exit plan? You have reached your original goal.

This ladder is fairly conceptual and you can adapt it to suit any business. By thinking through the growth stages that you are likely to go through you can plan ahead. Each rung of the ladder becomes a framework for your decision making processes. You will also be able to find which rung you are on by looking at what you are currently doing.

I find that this helps me in choosing where to focus my energies - I can see what I should be doing to get to the next level.    When I plan my weeks work I can see where I am and where I need to go so it helps me to sort out my priorities.

Once you have identified the stage you are at you can start adding detail to the next level. It is so easy to get bogged down in your day to day work that it becomes really hard to think ahead.  The beauty of this plan is that you are always focused ahead, not looking back.

The Ladder is also useful where your business grows faster than you expected. If you find yourself on stage 3 very quickly you will need to adapt fast. Having the stages identified will help you fill in any gaps that would normally have been resolved along the way. It is a great planning tool because it keeps you on track at all times.

I think the hardest business planning question to answer is “How will I know when I’m there?” The answer, ‘how big is your ladder?’

Anne Maybus is a writer and business woman. She owns Beauty Banquet (http://www.beautybanquet.com.au) and Clever Streak (http://www.cleverstreak.com)

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