Just typing out that small yet significant phrase almost causes my brain to fog over.
Back in my corporate days, business plans and projected cashflow spreadsheets where part of our weekly activity and monthly management meetings. It was expected that we focus on our 12 month revenue goals, knowing exactly what sales were chalked up on the board, as well our pipeline and promised contracts.
Every monthly meeting I had with the other Directors in the area spent at least half a day going through our figures and reporting back what was going well and what wasn’t. And it was expected that the same agenda was followed when I gathered my managers together for my monthly meeting too.
Remember this, too? If you’ve come from the Corporate World (it deserves capital letters, don’t you think?), following budgets, monthly sales targets and 12 month cashflow projections was probably part of your working week, too.
So why is it when we start up our own businesses and decide to “go it alone”, that business planning goes completely out of the window?
I did try.  I promise I did! And you probably tried too, didn’t you?
You opened up a new spreadsheet, put the months of the year across the top and then probably stared at the empty fields wondering what on earth figures to put there. What prices do you charge? How many clients are you expected to have a month? What happens if you get a big contract that comes in? How many of those do you add to your projections?
What seems initially as a simple and basic business principle to follow, when you try to apply good old corporate business planning principles to selling “you”, the fog can easily come down before your eyes and you end up frowning at your spreadsheet as you have no idea what figures to pluck from the air.
And even if you do manage to guestimate what revenue and costs you intend to have over the next one to three years, how helpful is that document in helping you understand what has got to be achieved today, tomorrow and the next day?
Traditional business planning can be a waste of time for small business owners …
You see, I believe traditional business planning for businesses like mine and yours can be a waste of time. Completed cashflow projections and sales forecasts can make you feel it’s the right thing to do but often these spreadsheets and documents remain hidden on your hard drive or in the top drawer of your filing cabinet because they don’t help you with your day to day plans.
Now before anyone jumps at me shouting, “Ha! Fail to plan and you plan to fail! How can you possibly run a successful business without knowing where you are headed?” … I totally agree. I am not for one moment recommending that you start up a business and simply meander through the months without a plan.
But if you are like most entrepreneurs and small business owners, creating spreadsheets and ten page documents just to tick off the box that says “business planning” are just not going to provide any useful guidance for your day-to-day activity.
Here’s how I break my own business planning down and help my clients to do the same.
Mountain Climbing
You have to have a “big” vision; a mountain that you want to climb, to stick your flag on top of the summit and claim as your own.
Whether it’s a two, five or ten year plan, that’s up you and how far ahead you can see. You may want to pay off your mortgage or you want to put your kids through private education. Both these may need a longer vision and focus for you.
However, technology and innovations in today’s world mean that the way we do business changes rapidly. The king of the market place is really the consumer and they can be a right fickle bunch! The product or service that is hot this year, can be dead and buried the next. So be aware of this as the target client you decide to work with may not allow you to plan more than 18 months at a time.
But you’ve got to have your reasons why. Without digging deep into your soul (I know, you don’t expect me to get all spiritual, do you Ha Ha) and understanding your true motivations behind what it is that you do, you could end up wasting your time of half-baked ideas and chasing a passion that never turn into profits.
The mountain that you climb needs to be quantified so you are absolutely clear on what it is you are after. Whether you use a vision board, create a vision movie, write your own affirmations … it’s up to you and what you respond best to.
The trick to getting this to work is having your mountain defined in a way that you can instantly recognise and feel what it is you are after.
[features_box_paper_white width=”75%” + border=”2px”]Your big vision has to be emotionally charged; it has to have the power to turn duvet days into power days.[/features_box_paper_white]
Hill Walking
OK, you’ve got your mountain. But trying to climb a mountain every day is bloody hard work. In fact, it’s impossible. (Well OK .. not really impossible. The record for climbing Mount Everest is 16 hours and 45 minutes, but for most “normal” people the journey is planned across two or three weeks.)
If you sat at your desk every day just focusing on your mountain to climb, it’s just too overwhelming. Where do you start? What do you right now?
You need to break you mountain climb into several hill walking expeditions. How long each one is will depend on the size of your mountain. However, I work with clients to break down the “big” goal into three monthly chunks; usually three months, six months and twelve months.
It’s a great exercise to do and I love starting with the vision and being able to work backwards, making decisions on where the business needs to be at particular points to make sure they are on track.
It’s also a great reality check as it allows you to realise what else is going in your life and how much time and energy you will need to make those longer hills walks.
Your Daily Constitution
This final part of the business planning process is what really makes it all work. And it’s exactly why those spreadsheets and twenty page documents don’t.
You need to know what to do today, tomorrow and the next. You need your daily constitution to keep you on track, as well as fit and healthy.
This is not about creating daily to-do lists. But simply giving yourself three or four daily, weekly and monthly actions to take that, if done every day, week and month, will ensure you stay focused and achieve your “big” vision.
So, business planning is important. Critical, to your success even.
If you fail to plan, you plan to fail.
But if you stick to the traditional corporate-style spreadsheets and forecasts, you may find you end up meandering through the next twelve months ending up in a place that wasn’t where you intended to be, usually poor and bereft of clients!
OK, now your turn. What do you think about business planning? How do you approach this area of your business?
In the comments, I would love to read your thoughts and ideas on how you go about setting goals and keeping you on track for success.
[features_box_grey width=”75%” + border=”2px”]P.S. For more information about Karen’s business mentoring programmes and how you can get your mountains, hills and daily constitutions clarified, click here.[/features_box_grey]
Photo Credit: LillieCam
Passion!! Yes, yes, yes!!! In my view that has to be your start point, and your checkpoint too. Keep on checking in with yourself that your passion is still in the same place, and do it regularly. When you run your own small business, it’s passion (to my mind) that’s the one ingredient that makes the difference, and can make you stand out from the rest. Big corporates don’t have this luxury, or experience the fun you can have with passion. I’ve always believed that if you must have passion for what you’re doing to drive you along, to put that extra spark in, and for people to see who you are. As small business owners we can adapt and change much more quickly, and should be prepared to do that often.
I’ll admit to being a bit of an anti planner (like you Karen, far too many years before this in corporate life), but the one thing that planning gives you is the chance to change your plans. Plans should never be set in stone, they are the pathway you have decided you can walk, and each step along the way, you can stop for a moment to see if you’re still going in the right direction. If something then tells you you need to take a diversion from your path, your plan can help you to do this well.
And to get quite spiritual (because that’s who I am), yes, keep talking to your soul, it won’t lead you wrong. In fact, if you don’t listen to it, chances are you won’t be as successful as you could be (in whatever way you’d define success – that’s something very personal), and you could actually be quite ill (happened to me). Good post Karen!!!
thanks for your thoughts Jean. I feel your passion from here :O)
Yes! My clients have a general direction, and they do plan things but in nowehere near the depth of the Corporate World (yes it does Need Capitals 🙂 ).
An hour a week I think it fine – it’s more important to act and adapt, IMHO.
If you can schedule an hour a week, you are on the right track!
Funnily enough, I did at the very start put together a Business Plan & Strategy. This has been to enable me to see where I want to get to, and is not something I continually refer to. As per your suggestions, I monitor what is happening in 3 month chunks – so I can see how I am doing, what type of work I getting in etc.
The mountain climbing analogy is a great way of viewing it – as I am a regular Fell walker, and definitely NOT a mountain walker. I like the emphasis on breaking things down into smaller and more manageable bites.Your article has reminded me to remember the “original” strategy and vision I have for the business, but manage matters in a way that I am not daunted and hamstrung by my original vision.
thanks for stopping by Helen. Glad this article has been useful reminder.
As usual a great article by Karen that really sums up issues that are so true to small business owners. I came from the Corporate world (yes a cap ‘C’ is definitely right here!) and planning in our marketing department was everything. Now I even run a business that takes my guests on real hill and mountain walks (mostly hills in the Peak District, but a couple of big mountains too) and I totally agree that most of us small business owners don’t plan. I’m as guilty as the rest. So I’m going to be printing this article out and try and get up the mountain, hill by hill. Thanks Karen!
You are welcome Wendy. And with the view from your fabulous guest houses, the mountains and hills must be a great inspiration to you. Plenty of fresh oxygen to keep the grey matter fresh!
Once you know exactly what your goal is, writing down how it feels and what journey you took to get there as you place the flag on the top of the mountain can be a fantastic motivator when the going gets tough. Daily reminders of this can keep you on track, and re-enforce the actions required.
Hurrah, at last I know I’m not alone. Could make a bonfire of the management accounts I’ve started… oh for the days when I had an accounts department. Now it’s just me and a calculator and not very often do the twain meet. Am starting the process by shredding every file of paper I no longer use. Clarity is my aim, goal setting, then planning. Struck me that most people, including me, put more planning into a two week family holiday than they do for their business. For me the key will be when my business is as much fun as the two week holiday.
A vey timely article as I attended a very interesting SMARTA 100 event in London last week about business planning. It was especially as I had never paid much attention to a business plan as I had never had to apply for a bank loan. In a similar vein I asked a question of the panel of experts about the relevance of more abstract planning and got some useful clarity around the distinction between the type of vision planning that you can use to keep the dream alive so to speak and the formal documentation that VCs would like to see when approached for funding. Whereas the latter had quite distinct parameters and information requirements (not hyperbole and conjecture!) the former could take what ever form you needed to get buy in from yourself and those around you.
As someone in the creative industries, spreadsheets leave me cold but I was recommended to have a look at http://www.businessmodelgeneration.com/ which has some very interesting tools to help with business planning.
Hmmm I hate business planing on paper. I do know my vision and I plan daily….tasks that I need to do. I know where my business is, I don’t need to write it down on a piece of paper. I’m not really sure my type of planning would stand up as a business plan at all really.
So my question is this -. What is the difference between paper planning and mind planning?