Realistic Small Business Planning (NID52)Scott Williams
Conventional business planning methods often don’t suit small business owners.
But it is important to know where you’re going and why, and that your strategy is sound.
We have developed a planning system we think is better tuned to the needs and realities of small business.
Let me outline the concepts of our small business planning system in this nugget.
The following is a Transcript of the Video and Podcast on these buttons
Planning in a Big Business
Conventional planning methods designed for big business often don’t suit small business.
They are better suited to large organizations that;
- are financially stable,
- have a track record that can easily be extended a few years,
- have a lot of staff so adding one or two more is easily absorbed and
- which have staff resources they can dedicate to planning.
A big business wants a three to five-year plan. But a small business can barely see past the next six months.
Small Businesses operate in a Different Reality
Small business knows future financial projections are make-believe because the future in an evolving small business is not very predictable; especially early on. The owner doesn’t know what will work so needs a planning method that allows for frequent unforeseen changes.
Small business growth tends to come in lumps.
It starts with a one person band or solopreneur. Then followed by a micro business of one to four staff that literally quadruples the business revenue necessary to pay for all those new salaries.
Then it expands out to become a small business with up to 25 staff. Then the uncertainty associated with hiring new middle management becomes a new unknown to be planned for.
GamePlans are bite-sized chunks
Rather than big, detailed, and multi-year plans, we have a system. we call GamePlans.
Typically a small business falls into one of three longer range business life-stages;
- First of all those businesses that want to grow
- Next, those that are happy to slow down and have a personal lifestyle so they don’t want to grow as quickly but they want a better quality of life, and
- Thirdly, those that want to exit the business.
Since we think Owners have a reasonably good picture for the next financial quarters direction, we encourage a new GamePlan for each quarter.
Towards the end of the present quarter, you can set up the next GamePlan for the following quarter depending on what you’ve learned in the current one.
That way you only do enough planning to cover what is currently important.
But always have a multi-year Goal in mind so your GamePlans keep heading towards that Destination.
StrategyTrees ensure every Important Issue is Covered
Within each GamePlan, we encourage drawing up a StrategyTree. This is done in dot point format or in a mind map.
You start with the four to six Critical Success Factors that have to be done for a GamePlan to succeed. Things like what is the necessary revenue? What about hiring critical staff? And any others that must be satisfied if the GamePlan is to work.
Each of these Critical Success Factors has several Necessary Conditions that have to be done for the Critical Success Factors to succeed and in order for the GamePlan to reach the Destination for the quarter that you want.
We also show you how to choose the priorities when you’re facing many issues demanding your time
More on Small Business Planning
You can read more about our high tempo, but small business friendly, planning system on our website under the business planning menu.
This approach takes the realities of small business life into account when setting up a plan.
Always remember that our advice is general in nature because we don’t know the specifics of your business. Always seek specialist advice for specific issues.