In the ever-evolving landscape of entrepreneurship, the journey to small business success can often feel daunting.
Many business owners possess the passion and vision, but without a clear roadmap, those aspirations can quickly fade into uncertainty and stress. That’s where the power of effective planning comes in.
In this essential guide, we’ll delve into a proven, repeatable, planning strategy designed to streamline your processes, enhance productivity, and pave the way for sustainable growth.
Whether you’re a seasoned business owner or just launching your venture, mastering these techniques will empower you to transform your ambitions into realities.
Join us as we unlock the secrets to creating a robust foundation, enabling you to adapt and thrive in today’s competitive marketplace. With the right planning strategies, success is not just a dream—it’s a repeatable outcome waiting for you to claim it.
12Faces GamePlan theory is based on best practice that has evolved in the big business world. We took this “Distilled Wisdom” from leading business writers and turned it into a simple, repeating, planning cycle we call a GamePlan. GamePlans are based on noted author Jim Collins concept of relentlessly pushing a giant, heavy flywheel to build momentum for business success which he outlined in his book “Good to Great”.
Each GamePlan cycle uses the Plan, Do, Check, Act (PDCA) process used by Toyota and many other large businesses to plan and execute the next Quarterly GamePlan.
More on PDCA from 12Faces
Understanding the Importance of Planning in Small Business
In the dynamic world of small business, having a well-thought-out plan is akin to having a guiding star. It illuminates your path, helping you navigate through the complexities of entrepreneurship. Without a plan, even the most ambitious business ideas can flounder, leaving entrepreneurs lost and overwhelmed. Planning provides clarity, setting a clear direction and defining the steps necessary to achieve your goals. It transforms abstract visions into actionable strategies, ensuring that every move you make is purposeful and aligned with your ultimate objectives.
Effective planning also helps in resource allocation. Small businesses often operate with limited resources, and making the most of what you have is crucial. A comprehensive plan allows you to prioritize tasks, allocate budgets wisely, and avoid unnecessary expenditures. By having a clear picture of your financials, marketing strategies, and operational needs, you can make informed decisions that drive your business forward. Additionally, planning mitigates risks by anticipating potential challenges and preparing contingency plans, thereby enhancing your business’s resilience.
Moreover, planning fosters accountability and performance tracking. When you set specific, measurable goals, you create benchmarks against which progress can be assessed. This not only keeps you on track but also motivates you and your team to strive for excellence. Regularly reviewing and updating your plan ensures that you stay adaptable and responsive to changes in the market, helping you maintain a competitive edge.
Ultimately, planning is not just a one-time activity. It’s an ongoing process that evolves with your business, guiding it towards sustained success
More on GamePlans from 12Faces
Time Frames for Effective Small Business Planning
Unlike big business, small business works on much shorter time spans and a more fluid business environment. You have much less money and human resources so SME planning needs to adapt to suit.
You need a dynamic and comparatively short term planning horizon that allows for rapid changes in priorities as their business evolves.
The 12Faces GamePlan system has evolved to meet this need.
It draws heavily on the best business writers and adapts their insights to a small business world. The research backing for each step follows.
Begin Business Plan with the Destination in Mind
There can be no doubt a business needs its “guiding star” as a point to aim for. Otherwise, it is just rudderless!
Big business is comparatively steady-state and can predict likely outcomes several years in advance. They can have fairly detailed Smart, Measurable, Achievable and Timed (SMART) goals. Indeed they often need them as KPIs and performance bonuses may be tied to them.
Many small business are much more dynamic and tightly framed Goals are pointless.
But, you still need a Destination to aim for.
We suggest a three year time frame and a general description of where you want to be in three years
This can be fairly general and typically include;
- a focus on one of the three typical small business owner scenarios
- growth or
- a better lifestyle (e.g. holidays, family time etc) or
- a desire to exit the business and sell it off or
- just like a child, your business goes through growth spurts. Startup, solopreneur, micro business (1-4 staff), small business (5-25) and so on. Nominate any goals relating to business size.
- We encourage you to put a date in the Destination sentence so you have very clear goal in mind.
- we don’t encourage specific financial goals as they almost certainly will not be met. Picking a figure three years into the future is difficult. You can use goals like “be profitable after paying myself a market salary”
Each such stage brings different sets of issues to be addressed. And all of them can happen within any 3 year period. This is a reason why fixed goals are often not suited to small business.
By way of example, your 3 year Destination SMART Goal sentence might read like this;
“By 1/1/2029, my business will have grown to over a $ million in revenue, be profitable after I draw a market level wage and have competent middle management so I can have more time with my family during their school years.”
More on SMART Goals from 12Faces
Set a Meaningful Planning Period for Business Plan
As much can happen in the three years to our Destination, we don’t want a very long planning horizon. We want a period that can quickly adapt to the changing, and often unknown, circumstances small businesses face.
We have adopted the best principles from the Agile and Scrum project management techniques written about in the “Agile Manifesto” and later books and developed for fast changing environments like IT.
We have adopted a 3 month Financial Quarter as our GamePlan planning horizon. It is long enough to get stuff done given small business owners have many demands on their time. But it is short enough to be able to review plans as the business environment shifts.
It also conveniently ties into accounting records and can give meaningful data. Too short a period and the accounting may not be reporting lags and outstanding income and expenses. Going Quarterly smooths this out and allows account results to be feed into the planning cycle. This is the “Check” stage of the PDCA cycle mentioned above.
Within this 3 month period, the owner executes several “Sprints” (also based on Agile and Scrum theory). These are comparatively small tasks that are the “Do” part of PDCA followed by a “Check” and then an “Act” stage from PDCA when changes are made in the micro-business plan before launching the next Sprint. A Sprint might be 1-2 weeks as the owner chooses. Long enough to get something done but no so long that the owner runs out of planning tasks to execute in the Sprint.
If the owner has also tapped into our volunteer business mentor option, the next Sprint meeting can co-incide with the next mentor meeting so the owner’s mentor “brainstrust” experience is also bought to bear on the planning.
Researching Candidate Tasks for the Quarter GamePlan Period
Sometimes owners get fixed on one “grand idea” and don’t give adequate thought to casting their thoughts wider to see what other candidates they might find to consider in the GamePlan period.
We have learnt from the famous quote by “E Myth’s” Michael Gerber; “Work on the Business Not In It“. We encourage owners to step outside of the day-to-day and look further afield for good ideas.
When doing this, remember how knowledge is compartmentalized. Donald Rumsfeld is remembered for the Rumsfeld Matrix of 4 bundles of information;
- what you know you know
- what you know you don’t know
- what you don’t know you do know and
- what you don’t know you don’t know
With that in mind, we suggest the following avenues for “brainstorming” up new ideas using other inputs;
- mentors, friends, staff may have ideas on issues the business faces
- AI can scan for option on specific topics. While not necessarily reliable, possibilities that it suggests might help the owner realise a “don’t know, don’t know”
- financial analysis can suggest changing trends in the business deserving attention
- 12faces has produced a number of “prefab GamePlans” for e.g. Distressed businesses, local digital marketing. These can be adopted for a financial quarter Gameplan or drawn on for ideas.
More on Identifying Candidate GamePlan Tasks from 12Faces
Prioritizing Tasks for next GamePlan
Most likely you will end up with far more “candidate” tasks for the next quarterly GamePlan or Sprint than you can possibly do.
So you need a system for prioritising to “separate the wheat from the straw”.
Fortunately, there are a few simple guiding principles to make this a bit easier.
Theory of Constraints comes first when planning
The first is Eli Goldratt’s Theory of Constraints first outlined in his book “The Goal‘. We first heard of this when we read that Jeff Bezos of Amazon fame made every manager read this book; and he turned out pretty well!
If you imagine an hourglass, nothing can be done to make it run faster unless and until the pinch (the bottleneck) is widened. It is the same in your business. There will be 1-2 things holding everything back.
Nothing much will improve till you get the bottlenecks (constraints) to run faster.
Therefore, when planning your next GamePlan or Sprint, the first place to focus on is the Constraint. You make that the primary goal for the next planning period.
More on Theory of Constraints from 12Faces
80/20 (Prateo) Principle helps narrow planning focus
The 80/20 Principle was first developed by Wilfredo Pareto in the 1890s and popularised by Richard Koch in his books beginning with “The 80/20 Principle”.
Essentially, he said people can either;
- spend 80% of their time doing trivial things like social media, streaming media or
- spend 80% of your time on the 20% of things that make a difference like improving your marketing system and
- the difference is the second group will be up to 16 times more productive and successful than the first group because they focused on what is important to get ahead
At this step in prioritizing the important issues to focus on, you can work out your top 20% of tasks.
Sometimes that is evident. Other times you will be faced with lots of variables to process and it seems difficult.
There are management techniques like “Weighted Scores” that can help clarify which are most important. This approach is very helpful when faced with a decision to buy a car when there are many positive and negative characteristic in each car under consideration. Weights and Scores can give you clarity on the best buy by taking into account the differing importance you put on each selection criteria for the car of your dreams.
More on 80/20 Rule from 12Faces
Plan for Three Activities for Small Business Success
A good small business planning system should consider investing time and other resources into 3 groups of activities.
GamePlan Primary Quarterly Goal
As discussed above, the GamePlan should probably have just one or two primary goals for the quarter. And these should normally be the Constraint that is holding back progress. Working on anything else won’t move the business forward too much while the main bottleneck is not getting attention.
Kaizen Quarterly Goals
But a business also has several systems like marketing, operations and accounting that can be improved as well.
12Faces suggests a Kaizen strategy for these. This Japanese work translates to “incremental improvement”. It has been adopted by many larger companies like Toyota as a way of steadily improving existing systems.
Just like the business as a whole, individual systems will have their own Constraints that are holding back the steady improvement of those operations.
By identifying them in the same way as the company Constraint, the fastest possible incremental improvement in these systems will be achieved.
In a small business, the 80/20 Principle suggests that only a few of the systems that will have the biggest impact should be worked on. In a larger firm, there may be managers and workers tied to those systems who can implement Kaizen improvements in just their own areas.
More on Kaizen from 12Faces
Maintenance has a part in Planning Cycle
Any successful firm needs to also set aside resources for maintenance of the systems of the business.
This just means implementing the routines like waste reduction, invoicing to ensure cash flow and other routine operations so they are not forgotten.
An efficient way to ensure this is to develop Standard Operating Procedures (SOPs) and require staff to follow those agreed steps so there is no back-sliding on best practice.
Dashboards can be used to tick off these procedures as they are done to track successful performance.
More on Waste Reduction from 12Faces
Case Study: Business of the Year Petals Network
Petals Network is a world-wide floral relay service like Interflora and Teleflora. It won Telstra National Small business of the Year in 1996.
And it continued to thrive as verified by other awards it won including;
- listed 4 times in the Business Review Weekly magazine Fastest Growing Businesses list 1997, 98, 99, 2001 (now Financial Review)
- Won “NSW Premiers Regional Exporter of the Year” in 2000
- “National GIO Innovative Service Award” 2000
- Won 2005 “Australian Business President’s Prize for Best Business Award”.
- Finalist in 2005 Telstra Small Business Awards.
Petals’ success was based on an early version of the GamePlan System developed by Petals Network’s then owner. Petals was purchased by US-based Teleflora International in 2011 giving its owner a great exit. All staff were retained and its AU, NZ and UK offices still operate in the country town of Armidale.
Petals represents the ideal history for any small business. Passing through startup, fast growth, lifestyle and eventual exit stages all the while growing in staff numbers and world-wide coverage. The same GamePlan system that worked for Petals is available to you.
Conclusion: Next Steps Planning Business Success
Embarking on the journey of small business success requires a commitment to continuous planning and adaptation.
As we have explored in this guide, effective planning involves setting clear goals, leveraging the right tools, and regularly reviewing and updating your strategies. By developing repeatable planning processes, you ensure consistency, efficiency, and adaptability, all of which are crucial for sustained growth. Remember, planning is not a one-time activity but an ongoing process that evolves with your business.
To take the next steps towards business success, start by using our GamePlan planning system to identify the priority areas for improvement. Implement the strategies and tools discussed in this guide, and involve your team in the process to gain diverse perspectives and foster a sense of ownership. Regularly review your progress and be open to making adjustments based on new information and market changes. By staying proactive and responsive, you can navigate challenges and seize opportunities for growth.
Ultimately, the key to mastering small business success lies in your ability to plan effectively and adapt to changing circumstances. With the right strategies in place, you can transform your aspirations into realities and achieve your business goals.
Remember, success is not just a dream—it’s a repeatable outcome waiting for you to claim it. So, take the insights and strategies from this guide, and embark on your journey towards a thriving and successful small business
This article was provided by Scott Williams AO FAIDC. It describes the way best practice in many management areas has been brought together in the 12Faces GamePlan System. The Goal is to provide an easy to use and repeatable “flywheel” to improve small business owners’ outcomes. Scott is the Founder of NFP small business support services 12Faces and MentorSME and has a Philanthropic Foundation supporting students in education. Scott’s business Petals Network was National Small Business of the Year and 4 times in the Top 100 Fastest Growing Australian Businesses LinkedIn