Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated.” — Sun Tzu: The Art of War
We are already in June and half-way through the year. Is your business on the right course? Are you happy with the way your business is moving?
I asked five business owners these two questions. Only one of them was happy as his business has so far performed beyond his expectations. The other four said they were struggling; “Sales are slow and money is tight”, they all said.
This is a common scenario in this country. Businesses are struggling because of low liquidity, shortage of finance, low consumer demand, cheap imports — the reasons are endless. But some entrepreneurs are thriving despite these problems.
These are the ones who take time to plan. They sit down with their teams and map out strategies for success. Instead of reacting to problems, they prepare winning strategies in advance.
In this month of June, they are already reviewing their goals and targets for the purpose of determining the best course of action for the remainder of the year.
Strategic planning has five main benefits. These are as follows:
The purpose, mission and goals of your business are clearly defined. Without a clear sense of direction, you run your business blindly and this will never lead you to success.
Your key people clearly know their responsibilities, develop a sense of ownership and are accountable for the results expected.
The most effective use is made of the organisation’s resources by focusing them on the key priorities.
The strategic plan provides a base from which progress can be measured and establishes a mechanism for informed change when needed.
The strategic planning process brings together everyone’s best and most reasoned efforts and has the important value of building a consensus about where an organisation is going.
Let me share with you some steps that you can take in order to make your strategic plan for the rest of the year.
Define the results you want
In his book, The Seven Habits of Highly Successful People, popular author and business expert, Stephen Covey, recommends that you start with the end in mind. You and your team need to clearly define the business’ mission and goals; what you want to achieve within a certain timeframe.
The goals should start with the financial results you want, because in the end it’s the bottom line that matters.
Every business needs to generate profit and provide sufficient income to its owners.
The profits are necessary for the maintenance of the business, replacement of ageing assets and financing future growth. Your goals should be specific in financial terms, such as net profit required and the level of sales to yield such profits. It will also be useful to set the expenses budget, as they directly affect profit.
You also need to set goals regarding your products and services, operations, marketing, personnel, business growth and sustainability.
Develop a realistic plan of action
When you know where you are and where you want to go, you can now map out a plan of action for bridging the gap and achieving your goals. The action plan must include specific activities with key people assigned responsibility for results. Plans should be specific and time-based.
I am giving away five CDs containing the e-versions of my book; Developing a three-step strategic plan to grow your business. To get a copy simply send me an email stating three major hindrances you think are stopping small businesses from growing fast in this country.
Phillip Chichoni is a strategic business planning and financial management consultant who works with entrepreneurs and SMEs. He may be contacted on email firstname.lastname@example.org