You have a plan and a budget, and they are reviewed regularly. Your plan aligns to your purpose, and has a clearly stated "big hairy audacious goal." You have benchmarks for success, which are reviewed at least quarterly. The plan continues to evolve, and you capture new information in a living document. Key elements should be presented on just one page. Planning is a constructive and enjoyable process; it identifies your business model and how money moves throughout the business.
- Everyone talks about planning. Do you feel a little bit scared when they say, "Oh, maybe my plan's not as good as somebody else's plan." And you think about the construct and all these very serious things. I know many people have sat down for literally, weeks and weeks on end to write their first business plan, often to present to a bank to get some funding. But it seems like such a daunting task and it doesn't need to be. So, business planning is a process. It doesn't really start with a blank piece of paper, it could, but really you do need some insights.
Great plans are actually set from the past. What did I learn? what have I discovered? And now I need to write it down. So, you will or need to discover one of the two or three critical metrics in your business to make you successful. Because it is those critical drivers which ultimately will determine your success. And that's where you're going to be wanting to spend your money, your resource, and your time. So, let's think about some of these fundamental things.
Where do you find customers? How many are there? What does it cost to find them? Who else is already talking to them? What do they say about you? What do they love about you? What do they really not love about you? And what are your critical metrics? So if I look at my own business, I look at what is the cost of acquiring a customer. But secondly, what is the lifetime value of a customer.
Because I know it might cost a little bit more to get them in the beginning, but I'm going to keep them for a long period of time. So, in your plan know your critical numbers, your critical metrics, then you've got to know what drives them. How much money do I need to spend to make a difference? What sort of things do I need? So, if you literally think about the business plan is, what is it? What are my metrics? How am I going to build rhythm around this? And the critical piece, do, analyze, do.
There's such a thing as minimum viable product, MVP. Doesn't matter what business you own, you want to get a product in front of a customer to see if they pay real money for it. I'm on Shark Tank, Australia. And can I tell you, the number of times people walk into the tank and we say, "What do customers think?" And they go, "I don't know, we haven't showed anybody yet." "How much have you spent on your business?" "Half a million dollars." And we go, "No." It's your customers who will determine your success. So, the business plan is always premised on your key metrics, what do customers say, and doing more of it.
So, we know we need a plan, but what's in a plan? It is always great to make sure you restate your purpose, your vision. Do the values again, put them there. Everywhere, loud and proud. Also, your big hereodacious goal. Making sure that, that is clearly spelled out. Your pillars, what is the business that you are in? Your sandbox, or your pillars for success. The things that you're going to work on and the what you sell. But then also, the resources that you're going to need over what time frame.
How much money you're going to need? What are the key elements that are going to trigger success? Is there any bottle necks that you really need to look at, even in the short term? In other words, I can't get X if I don't invest in building my database. Or I need the infrastructure to manage my customer relationships. So, there's dependencies in a plan and you need to specify the dependencies to make sure that, if we want this, we're going to need to do this by this time frame and get this outcome.
The next part of a plan is staying on track and reviewing it regularly. At least once a month, if not once every two weeks. You may use a simple red, amber, green when it comes to, "Yep, we're on track with this one, or, we may get there, or red we haven't started this." And it really helps you identify what parts of the plan are at risk. Later, we'll talk more about how you give key responsibilities in the plan to people. Because ultimately, a great plan will also have accountabilities.
Who is responsible for delivering that? You know, everybody said that they were going to get it done and nobody did. So, you really need to put some initials next to who is ultimately accountable for the delivery in what time frame. All great plans are based on the past, but are time-based for the future.
- Finding your purpose
- Keeping the passion alive
- Setting the framework for success
- Ensuring that your people are aligned to your goals
- Setting your priorities
- Promoting your business effectively