How well are you managing your business? Is your planning helping you steer the business well? Are you controlling your own destiny? Are you satisfied with the business as is, or do you think you can do better?
Starting, growing and even surviving in business is a matter of navigating through the tough times and steering in the right direction. And that's planning.
It may not be a formal business or marketing plan document, but it better be planning and tracking and reviewing; or else you're not really managing.
With that in mind, test yourself on your planning and planning process by answering these 10 questions for your business. And unless you're a one-person business, ask yourself whether all the key players will answer these questions:
1. How do you define success?
Seems simple but it's critically important and often forgotten. Success might be growth or sales or profits or being able to take off at 3:30 p.m. to coach the kids' soccer team. Fame, fortune, independence, proving yourself right, controlling your time... they're all images of success. Some conflict with others. Do you know what success is for you?
2. What's your strategic focus?
Business strategy is like sculpture: it's about what you take away and what you leave behind. It’s as much about who isn’t your target market as who is. And as much about what you’re not doing as what you are. How are you different? What would your customers say? Do you know your strategic focus, and do your team members know it?
3. What are the main tasks?
You could call it tactics, business activities, programs, priorities or something else; what’s important is that you know what’s coming up and why. Strategy means nothing without concrete specific business actions to implement it. Do you know what’s next? If you’re part of a team, does the whole team know?
4. Do you have task dates and deadlines?
Sorry, but it’s simply human nature; things are more likely to happen right when somebody assigns dates and deadlines. People need to have concrete goals and they need to know results will be tracked.
5. Does every task have an owner?
You need to assign responsibilities to specific people, not groups or committees. Do you really know who’s doing what? Does everybody on the team know? Is peer pressure in operation, with metrics that measure performance, and that, preferably at least, all the key players can see? We’re looking at accountability here, and that’s vital to management. Business needs owners, owners need metrics, and metrics need tracking.
6. Do you know how to measure task results?
This is about metrics. Metrics and tracking generate accountability and management. People like metrics to work on. A good check on tasks is whether or not results can be measured. At the very least, a yes or no on completion. But the ideal is a performance metric like dollars, presentations, trips, proposals, closes, page views, subscriptions, calls, minutes per call, Klout score, etc.
7. Are you forecasting the critical numbers?
Don’t kid yourself. You need to estimate future sales, costs and expenses, and then track cash flow to manage a business. If you’re just watching balances, you aren’t managing that well. You’re risking surprises and losing opportunities. Business life blood is cash, and that’s about forecasts and following up.
8. What are your main assumptions?
We have to make assumptions because we can’t manage without them. But assumptions change. Keeping track of your assumptions and how they change is crucial.
9. When is your monthly review?
You can’t really manage and steer your company without a planning process that includes a regular monthly review. You have to schedule reviews in advance, stick to the schedule, review your assumptions, and make changes to reflect changing assumptions, results and needs. Without regular reviews, your planning is just a plan, use once and throw away.
The key is plan vs. actual review. Not just the numbers, but the trends, performance, and lessons in the numbers.
10. What needs to change?
Planning is about managing change. The business environment is about constant change, and you need the planning process to manage that change. With planning process, tracking, plan review, plan vs. actual analysis, you end up steering a company towards its goals. It’s navigation. And the planning process isn’t just a map; it’s a map beneath a GPS locator with real-time traffic and weather updating.
Cash flow is critical. Everybody knows it, sure, but how can you manage cash flow without planning? It’s not intuitive. People think in terms of profit and loss, but cash flow can be radically different from profits. Profitable companies run out of money. The profits don’t include timing of getting the money from sales, spending the money on goods to sell, buying other assets repaying loans. Planning needs to manage cash flow.
We could call that strategy, and then add the reminder: strategy is focus.
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