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10 Quick and Easy Ways to Start Planning Better
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10 Quick and Easy Ways to Start Planning Better
Are you running a business? Thinking of starting one? Trying to grow one? Even if you don’t need a business plan to show to bankers or investors, don’t cheat yourself out of planning. Here are 10 ways to get going with planning to help you steer your business.
- Call 10 customers. Choose them at random. Before each call, take a deep breath, prepare yourself to listen to what they say. Start by promising them you’re not disguising a sales call as something else, that you really want opinions. Ask them why they buy from your company. Ask them why they don’t, when they don’t. Ask them what your company could do better. Ask them what else they’d like to buy from you, that you don’t now offer.
- Do a sales forecast. Don't think it's that hard, don't think you don't have the expertise, understand that nobody else can guess better than you can about your business. Do a 12-month forecast, ideally with units and prices calculating sales, and direct costs and units calculating costs of sales. Don't sweat being right; it's planning, not just a plan, and you're going to follow up and track how you were wrong, in what direction, and what to do about it.
- Do a SWOT analysis. It stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal, and opportunities and threats are external. Make a list of as many points you can think of for your business, in each of these four categories. Better yet: if your business involves more than just you, bring others into this same discussion.
- Review your market segmentation and your segmentation strategy. Specify who isn’t your customer. Imagine for yourself a person or buyer who other people might think you’d want as a customer, but you don’t. Tell yourself why not. And don’t think I’m embedding some corny inspirational sales message in an irony here. No, I mean you start planning by understanding that not everybody is in your market. Differentiate. Focus.
- Do an expense budget. Do you know your burn rate? By that I mean how much you spend each month, regardless of sales going up or down? And do you know how much spending you plan related to sales? Do you have a good estimate of marketing expenses? Like the sales forecast, it's a simple exercise in a spreadsheet -- or at least, the mechanics are simple. Maybe the educated guessing isn't so simple. If you can, start with last year's expenses.
- Develop your mantra. Think of a single sentence that describes what you do. Ask yourself whether a customer would be able to tell, given that mantra, whose mantra it is? Or is it just fluff, something that any company in the business could claim? That's a tough test. Relatively few companies have mantras that really describe them. But it's useful to try.
- Do a milestones table. That's a matter of listing business activities and assigning start dates, end dates, who's in charge, and what the spending budget is. Even if it's just you, the one-person business, can you hold yourself responsible for what's supposed to happen on what dates?
- Revisit your vision Imagine yourself three years in the future. What do you want your to business look like then? Tell a story, paint a picture. Think about what should happen to get you from where you are now to where you want to be in three years.
- Develop your ideal customer profile. Think of this as characterization in a story. Imagine a person (or company, or institution, if you sell to companies or organizations rather than to individuals) who might be an ideal buyer. Describe that person in detail. Where does she live? What does he drive? How does she get to work? What does he watch on the television (if anything)? What does she read? Imagine the family situation, economic situation. Get to know that (fictional) person. Give him a name. Give her an age.
- Define your identity. Your business identity is how you're different from all others. It includes your specific keys to success, your core competence, your strengths, and your weaknesses.
Any of these suggestions will help you get past the myth of the business plan as a document, to be completed before anything happens, and then followed regardless of what happens. Instead, you'll be taking steps towards planning, which is a matter of process rather than document. Planning assumes change. Planning is modular, connected components. Planning is steering your business.
And one final note: this link to the business.gov resource page on preparing a business plan.
About the Author:
Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.