It’s that time of year again. No not Christmas, but a time when businesses should be measuring their performance in 2010 and putting in place plans for 2011. I hesitate at this point to bang on again about the need for planning but in my experience e
ven a simple plan makes a difference. Its not the plan itself, but the thought processes we have to go through to get there which is so valuable. If you are a business owner then before putting together any kind of business plan you need to get your personal goals sorted before you start on the business goals. It’s stating the obvious but if you want to reduce your work down to 3 days a week, there is no point in setting challenging growth targets for the business.
That aside what are the 4 steps?
Step 1 work out your overall business goals for 2011, they could for example be headline revenue or profit numbers, market recognition, market share or finding a full time manager. Don’t set too many of these 2 or 3 is sufficient. Having done that, you now have a baseline on which to focus.
Step 2 is to identify the non-financial Key Performance Goals, ideally no more than 4 or 5, which need to be achieved to help achieve your overall goal(s). They might be: staff morale, attendance performance, expanding a range of products, identifying other profitable niches.
Step 3 is to identify cost reduction goals. These might include for example, reduction in debtor days, or dead stock, or seeking early payment discounts. These goals are there to balance the operations of the business and not to let the drive for revenue to get out of hand. They are also important in supporting profit centred objectives.
Lastly Step 4 which is to identify revenue objectives. This is the easiest to identify for most people, the difficulty of course is to identify the 4 or 5 which are the most relevant. It should be clear t
o everyone that having too many goals will only distract the business because it will lose focus on what is really important.
Image via WikipediaHaving completed those steps you have defined and clarified your goals and the key steps you need to achieve to get to your overall goals. This is not a plan to put in your bottom draw and forget, but something to use to review monthly performance with your staff. Its simplicity helps you focus on the key issues to keep conversations focused on what is important. You can also break the plan down into its constituent parts and use it for different parts of the business. So typically revenue objectives can be given to sales, cost goals to finance and administration and so on. This simple plan has transformed the success of businesses who’ve used it so grab the opportunity and get a plan for 2011 now.
Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.