Financials and Planning, not necessarily together
Happy New Year My Fellow Business Owners! I am guessing that your thoughts are somewhat in line with mine at the start of the year.
- I gotta get those financials done for the accountant
- I should really put some kind of plan together for this year
If I’m completely off base here, speak up! Maybe I’m missing something? If not, then join me in a quick quiz to help determine your likelihood of success in answering question #2 above.
- I am exploring new opportunities for growth in 2022
- I have financial goals set for 2022 for revenue and/or profit
- I have detailed plans for meeting my goals this year
Did you answer yes to at least two of these? Congratulations! Your business falls into the circle on the left.
Did you answer no to at least two of these? Then your business falls into the circle on the right.
Note that this is no Venn diagram – these circles do not overlap anywhere.
According to the “2021 Wisconsin Manufacturing Report”, “manufacturers are bifurcating between those who are investing for the future and those who are not.” Those who are embracing the future “forge ahead, while those clinging to the status quo fall behind. Many will never catch up.”
While this report was specific to manufacturing companies in Wisconsin, I would argue that the same logic applies to any small business. If you aren’t planning for the future, then you will fall behind.
STRATEGIC PLANNING IS NOT…
Just a reminder that setting a strategy means determining what you want your business to become in the future. It is the goal setting and the specifics that help you get to that outcome. Strategic planning is NOT the same as setting a budget for the year. And it certainly is not setting your marketing budget for the year – although I will argue that marketing and strategic planning are definitely intertwined. And taking last year’s sales and setting a goal of (pick your number) 5%, 15%, 50% higher for next year does not qualify as a strategy either.
If you are like most business owners, the concept of creating a strategy for the future and then working to achieve that goal sounds important, but somehow doesn’t get the attention it deserves. So many things get in the way – concern about hiring or retaining employees, supply chain issues, tax changes, healthcare concerns, and so forth.
Hiring a consultant might help you gain some insights into your business and its potential moving forward, but unless you, the business owner, are actively engaged in both setting and implementing the strategy, it’s not likely to succeed.
TIME FOR PLANNING
So what’s a busy business owner to do? It can be hard to find time to step away from the day-to-day operations of your business. It doesn’t matter whether you are a solopreneur, the owner/employer of a B2B firm or selling products D2C. No matter your business type, if you don’t set aside time to plan for the future of your business you may not have a business in the future.
I’m sure you don’t need me to tell you this. We all know that strategic planning is the key to a successful and growing business.
Despite that, according to the Harvard Business Review, “85 percent of executive leadership teams spend less than one hour per month discussing strategy, and 50 percent spend no time at all.” In addition, “on average, 95 percent of a company’s employees don’t understand its strategy.”
HOPPING INTO THE FUTURE PLANNING CIRCLE
What are some ways that you can encourage yourself to jump from the “status quo” circle into the “investing in the future” circle?
There are some great resources out there to help with the planning process, such as the many canvas worksheets from Strategyzer and the Entrepreneur Operating System from Gino Wickman and his book Traction, or the classics such as Porter’s Five Forces or Management Essentials from Drucker. And you can even look back at some of my past blog posts (although I am no Porter or Drucker!) – like this one – or this one.
But the key, of course, is to set aside the time to focus on the important (but not urgent) task of long-term business planning. A great starting point is the Eisenhower Matrix that I use with my Business Owner Roundtable Groups. Take a look at your daily tasks. Each one should fall into one of the four boxes of the matrix below. Those that are not important should be outsourced or delegated to others, unless they are also not urgent (like social media doomscrolling or reading spam emails), in which case you should just not do them at all.
That leaves things that are both urgent and important, which should be addressed right away – and those that are important but not urgent, which should be scheduled to be addressed at some point in the future.
STARTING THE NEW YEAR ON THE RIGHT PATH
As you reflect on these four categories for sorting your tasks, the biggest challenge may be finding the time to schedule the strategic planning activities that fall under Important but Not Urgent. So first, consider how you can eliminate some tasks altogether in that Not Important row. Then start to block time on your calendar to focus on the longer-term goals that don’t ever seem to make it onto your To Do list.
Some ways to ensure success in setting (and then achieving) your goals include:
- Tiny Steps: For each goal, break things down into tiny steps that you can move to your Important & Urgent list. The smaller the task, the easier it is to get it done in your busy day.
- Regular Assessments: Set aside weekly time to assess your progress and reformulate the tasks to be done for advancing your goals.
- Accountability: Share your goals with your business partners, mentors, or peer group members. The more public you make your goals, the more committed you will be to achieving them.
PLAN FOR THE FUTURE WITH A BORG
Join a Business Owner Roundtable Group (BORG) (not the other kind of Borg), where you make your goals known and have the group and the facilitator help hold you accountable. Monthly meetings with other future-focused business owners can make a huge difference! The group can help you address some of your urgent problems – and then also help you move from urgent to future-focused.
Here are some comments from business owners in groups I run or have run. See if any of these resonate with you:
- “We have all heard it, you need to take time to work on your business not in your business. The group creates a focus for me and helps me hold myself accountable for the things I should be doing.”
- “Meeting with other small business owners helps keeps focus on growth, provides insight that I would not otherwise receive, and encourages me. I always leave those meetings with ideas, inspiration, and feeling like I have friends who get it.”
- “The saying “it’s lonely at the top” is so true; as an Owner, you cannot have many necessary conversations with an employee of yours. You need a confidante that can relate to your situation and has the wisdom of a tenured business owner.”
- “I love this group – absolutely worth every penny. It’s great to have people who are in your same/similar position to bounce ideas off of in a completely safe environment.”
The easiest way to find the time for planning is to have it scheduled as a monthly meeting. The calendar commitment helps turn the meeting into a habit and puts you in the planning mindset as you discuss your business with your peers. Add in a facilitator who can help you prepare and implement your future-focused strategic plan and you’re now in the “Planning for the Future” circle!
Ready to plan for the future of your business? I have open slots for Virtual BORG members in the following three groups: (1) Solopreneurs; (2) B2B Industrial; and (3) D2C E-Commerce. Groups start later this month and meet virtually once a month for 90 minutes. Limit 9 members per group. See more and learn about special introductory discounts here.
So much change is underway, it can be a challenge to keep up with it all. How will automation, blockchain, climate change, demographic shifts and other external forces impact your business and your customers? Join me to keep an eye on these topics and more, to prepare your business for a successful future. Start by subscribing to my biweekly blog posts by email so you don’t miss anything!