Everyone has heard the adage, ‘failing to plan is planning to fail’ in some situation or another. Well this is also very true and vital for any business intent on achieving any significant growth. There are three very crucial pieces of information a person intending to progress has to have:
- The knowledge of where you currently are
- The knowledge of where you intend to go (your destination).
- The route to be used to get to this destination.
Failure to have the three will inevitably get the person lost or moving round in circles. This applies also when it comes to business. For a business to realize any growth, the necessary strategies must be applied to gain this knowledge. But how can this be achieved? The following are a few ways to do so:
Before you even start to set goals about what you want to achieve and how you plan to do it, it is absolutely necessary where your business stands at the time. Study the assets at your disposal, the market trends and how they have affected your profitability in the past, the amount of liquid cash that you have, areas where you may have failed in the past and generally any factor that could serve to give a picture of your current position. Self study is vital as it serves as a guide when it comes to the later stages of planning.
Carry out a S.W.O.T. analysis
A S.W.O.T. analysis is an in-depth study of the strengths, weaknesses, opportunities and threats to in your enterprise. Strengths and weaknesses are internal variables e.g. location, reputation and so on. Opportunities and threats are external variables. They are factors in the market such as demand and supply, market prices, competition e.t.c. The major purpose of this activity is to help develop a business strategy that is realistic and viable. It is therefore necessary to be as honest as possible when carrying out a S.W.O.T. analysis as it could very well be the determining factor on whether your plan is workable.
Set smart goals
Goals are probably the most important part of planning as they outline the destination of the growth journey of a business. Start by distinguishing between long term and short term goals. Long term goals should have a time limit of between three to four years. Short term goals should have a much shorter timeline of up to a month. Short-term goals act as a staircase to achieving your long term goals. As such these goals have to be S.M.A.R.T. an acronym for specific, measurable, action-oriented, realistic and time-bound.
- Specific: short term goals unlike the long term ones need to be concrete and detailed. For example instead of setting a goal such as ‘to increase revenue by the end of the quarter’ be more specific and include figures or percentage in increase that is being aimed for.
- Measurable: Ensure that the goals you set can be assessed after some time to determine their achievement or lack thereof.
- Action-oriented: the goals you set should have a clear course of action to their achievement. Every person in the enterprise should know and understand what they need to do to ensure goals are achieved.
- Realistic: Though goals should be challenging do not be tempted to set goals that are not achievable in the name of presenting a challenge. The failure to achieve goals is a great motivation and enthusiasm spoiler and in the long run you end up with a staff that is not motivated enough to even try to achieve goals.
- Time specific: All goals set should have a deadline to ensure things are kept on track and to create accountability.
- If you have additional staff it is prudent to involve them in making goals especially the short term ones so that they feel a sense of ownership towards these goals and therefore gain motivation towards their achievement.
Plan of action towards attainment of goals
Clearly outline how the set goals will be achieved. This plan should take into account all members of staff. Define each person’s role towards the achievement of these goals so as to create accountability. It does not stop there however, it is necessary to follow up to ensure everybody is satisfactorily carrying out their role and to employ both positive and negative reinforcement according to performance. Clear cut out roles for everyone in the business acts as a way to ensure they keep their eyes on the target and know what part they are required to play in order to achieve the set goals.
No matter how good an entrepreneur, one cannot be equally good in all fields. It is therefore necessary to share out duties according to expertise. In addition to producing better results, this also leaves one free to focus on the areas they are best in.
Though planning is not that much fun, it is a crucial part of business operations. It gives purpose and motivation to the whole enterprise’s fraternity and therefore increases performance. With proper planning you can stand assured that growth will be observed in your enterprise and the vice versa is also true.