Why taking time to strategize can be the most important part of your year
Most business owners spend more time planning their holidays than they ever do planning their business. This is what I have observed over years of working with small business owners. When I drop it into a conversation with a business owner, it’s rare that I get an argument. We know this to be true, yet so few do anything about it.
I am a Chartered Accountant by training, and I worked in a public accounting firm in the United Kingdom for almost 10 years. We used to offer a range of business advisory services to clients, one of which was a planning session. We would set aside a day to sit with the client and work through a range of financial scenarios; choose one of those scenarios; lock it away as the plan; then develop an action plan to achieve the plan. Every client I have ever worked with in such a session has found it to be incredibly valuable. Yet not one single client ever proactively approached me to run a planning session with them. It’s typically not on a small business owner’s radar.
In my business, we block out a day per quarter just to focus on the business. We run the business 90 days at a time. In our planning time, we review the previous quarter; take stock of what didn’t work so well and figure out why; understand what is working well and decide if we can do more of it; and then set our top five projects and key performance indicators for the next 90 days. Every single person in the business then has their own specific accountability outlining how they will contribute to the business goals. Effectively, we have systematised the planning process, and it works exceptionally well.
In the book The E-Myth Revisited, acknowledged small business expert Michael Gerber talks about how most business owners spend too much time working in their business — in other words, doing the technical work that the business does. He suggests that you should be spending much more time working on your business: thinking about new opportunities, products and markets; leading your team and implementing strategy; and talking with customers about their immediate and future needs. I think he is spot on.
One of the keys to making this transition is to schedule specific time to plan. I do not make to-do lists because unless I schedule the time to do the actions on the list, they will never get done! Instead, I physically schedule everything in my calendar. This is a simple concept but one that very few people grasp. So often I hear, ‘I agree that I should spend more time thinking about my business and planning for the future – I’ll start that next month.’ And it never happens. Or ‘I’ll make a note to get together with my business partner to work out what we’re going to do in the next three years.’ But again, you get too busy and it slips down the priority list.
On the other hand, if you pull out your diary or electronic calendar and physically block out a day where you will do nothing but planning, it is far more likely to happen, especially if you spend a little bit of money to hire an external venue. Sometimes making a small investment can force your hand to follow through.
So let’s assume you’ve blocked out a day to hold a planning session for your business. What are you going to do on the day? Here are my thoughts on what your agenda might look like:
- Brainstorm and list out your business’s strengths, weaknesses, opportunities and threats; then highlight the top five in each area. How can you build on the strengths, mitigate the weaknesses, take advantage of the opportunities and avoid the threats?
- What is your BHAG (big, hairy, audacious goal — a term originally coined by Jim Collins)? This might be your 10-year target for revenue, profit, time away from the business, locations, target market, customer types and anything else that is important for you. Wave your magic wand — what would this look like if everything went right?
- Break it down and get specific. Set out some interim measures that would show you that you’re making track towards your 10-year goals. Where would you need to be in three years to give you some confidence that you’re on target? What about one year? And then the next 90 days?
- Work 90 days at a time. If you could do just five big things in the next quarter that would move you forward, what would they be? Spend some serious time on this, making sure you have the right projects. Then, critically, assign an owner to each project and determine how you would measure the implementation of those projects (this will give you your key performance indicators).
- Put in place daily accountability to get things done. Hold a stand up meeting every single day at the same time, scheduled in everyone’s calendars. Have everyone give a brief update on what they are doing to ensure their project(s) are implemented by the due date. When people get stuck, deal with issues as they arise, rather than waiting until after the quarter to learn that you haven’t done what you said you would do.
This is a process you can do on your own, or you may want to bring in an external facilitator not tainted by your business. I find that a proactive accountant can play this role very well because they understand the numbers — you should not underestimate the importance of this.
In summary, in a sea of sameness, it’s easy to stand out. Give yourself an edge by taking time out of your business to think about how you can better serve your customers and improve your value proposition. Schedule that time and make it happen — it’s as simple as that!