Most businesses don’t have a plan for future growth. In fact the 2020-21 BStar Australian SME Research Report found that only 26% of business owners regularly dedicate time to business planning.
Why don’t more business owners take time to plan for future growth?
In my experience some of the reasons behind this lack of planning are that business owners:
- Don’t have time to think about the future
- Don’t know what to think about
- Don’t know who to speak to about planning
- Don’t believe that a having a plan will actually make any difference to what happens
- Don’t like the planning process and feel it is all too theoretical and ‘text book-ish’
But planning for your business growth doesn’t need to be dull, boring and difficult. And it’s not just about financial forecasts. It should involve the breadth of your business operations including your team.
How to make business planning really work
1) Don’t rely on a detailed document that you’ll never look at.
Your improvement plan is what you and your team must be living every day, working to a series of predefined and practical actions.
2) Don’t leave it in the hands of your accountant to tell you what has happened last quarter or last month. That’s often too late.
You need to have direct control and access to completely up-to-date data on specific aspects of your business performance on a daily or weekly basis.
3) Don’t try and do it all on your own. This just adds to the pressure on you.
The best way forward is to involve your team, get them more engaged, and give them the guidance and space to implement the improvements in their day-to-day work.
Let’s explore each of those three steps.
Ask the right questions and involve your team in planning your business success.
1. Don’t rely on a detailed document that sits on a shelf (or in your computer)
In days gone by the outcome of the business planning process was to create a comprehensive document that mapped out every aspect of your business many years into the future. The big assumption was that once you had such a thorough planning document it would be regularly used as a guide to running the business.
This style of planning was often driven by what larger (and supposedly successful) businesses did. It was also influenced by the requirements of banks and financiers who felt more comfortable if a business had a “solid plan”.
Another contributing factor was (and still is in many places) the approach taught at university business schools that focused on the long, verbose and academically-oriented business plan document. That was a great approach for students to show they could address all the academic theories, but not so much use for real-life business owners and managers.
And market changes develop a lot more quickly now than they did decades ago. Startup’s get funded and expand before they even make a profit. Customer expectations continue to climb. Not to mention the unexpected disruptions that occur such as COVID-19.
That’s why you can’t rely on a business planning document that sits on the shelf because it is too removed from actual business operations and the current competitive landscape.
You need a planning method that you can use every day, week and month to move your business forward such as a one-page plan and digital dashboard that monitors selected KPI’s (Key Performance Indicators) and progress with scheduled tasks/projects. In fact it’s best to have a rolling plan that is part of a continual planning process.
Understanding the critical drivers of performance in your business and being able to closely monitor them enables you to make smarter business decisions that will drive performance improvement.
An important component of modern business management is to have your key business performance indicators visible whenever you need them – real-time business data – and a digital dashboard is an easy-to-understand way to display the results.
2. Don’t wait to hear from your accountant to tell you what has happened last quarter or last month
By the nature of their work most accountants are focused on the past. In many cases the average accountant for businesses in Australia only completes quarterly GST, tax preparation and other end-of-year calculations for tax purposes. It’s all historical.
That’s not enough to run a successful modern business. You can’t expect to manage the business efficiently if you don’t have up-to-date data on your performance – both for financial and non-financial criteria.
Research from within the accounting industry in Australia shows that over 80% of accountants aren’t comfortable giving business advice. So it’s not surprising most accountants get consumed by doing detailed historical analysis (which is very important to have correct) rather than providing future-focused insights on your financial and business performance.
As a result, business owners can miss out on vital financial data that could change the way they manage their business. Does that sound like the position you are in?
3. Don’t try and do it all on your own; you’ll go crazy(er)
Most business owners are quite independent. In the beginning that can be a positive trait, helping to get a new business up and running, and to persevere through the inevitable growing pains.
However, for a business to really prosper the owner must create a team that can help them reach their goals.
Developing a highly-engaged, high-performance team is a challenge. There is no doubt about that.
Many studies in Australia highlight the fact that only around 25-30% of staff are actually engaged with what they do, with another 25% actually disengaged. The rest just do enough to get through each work day. The new term for this type of unproductiveness is “Presenteeism”, when people are present at work but not really being productive.
But there are ways to go about developing your team that have been proven to be successful. It doesn’t need to be a risky proposition for your business.
Some of the factors that contribute towards positive employee engagement have been identified as:
- Employees knowing what their purpose is within the business and how their role helps the business achieve its goals
- Feeling valued by the organisation
- Employees understanding how their success will be measured
- A feeling of inclusion and that employees can share their opinions at work
- Regular learning and development opportunities
Management strategies have evolved to reflect changes in community expectations. It is no longer effective to use the ‘Command and Control’ style of dictatorial management that was accepted a few decades ago. To get the best from today’s employees a more inclusive approach is required.
It’s important to understand that being inclusive doesn’t mean you can’t have goals and accountability. In fact, employees want to know how well they are performing. They want to have an impact, make a difference, and be valued. You can help them do that.
As the business leader your challenge is to develop a structure around how you build your team. You need to develop a strong culture in your business and encourage high performance by creating an environment that gives your team the guidance on what is important, the support to help them improve, and the space to surprise you with their achievements.
You must be living your business plan
Rather than follow the out-dated 30-page business plan approach to management, it’s much better to actually live your business plan. Sure, you certainly need to document business processes, policies, and vision etc, but the action really happens on a day-to-day basis. You must be able to monitor your progress by evaluating KPI’s that relate to the goals of your business.
That’s why I developed the Business Success Ecosystem to cover all the aspects of your business that really matter. Then we work with you to create and implement actionable strategies that are tailored to reaching your goals.
Business planning shouldn’t be boring or written off as being irrelevant. There is a practical and effective way to create your path to success. The future of your business relies upon it.
If you’re not sure where to start with the whole idea of business planning you are welcome to download the Reflection and Business Planning Guide or request a complimentary meeting. During the meeting we’ll discuss your options and answer any questions you have about planning for your business success.