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Business Planning for the New Year: What’s Your Resolution?
By Rob Fuller, Beyster Institute Staff
The coming of a new year is the traditional time for people to take stock of where they are and make plans for the coming year. First observed by the Babylonians about 4,000 years ago, their celebrations of the New Year lasted eleven days and also started the tradition of making resolutions. The ancient Greeks believed that one could affect the luck they would have throughout the coming year by what they did or ate on the first day of the year, a tradition that continues to this day in many places. It has been said that “luck is where preparation and opportunity meet.” From that standpoint, successful entrepreneurs create their own luck.
In addition to any personal resolutions to lose weight or quit smoking, as an entrepreneur you should use the start of the new year to think about the future of your business, too. Where do you want your business to be in the future? Three years into the future is an interesting date to plan for. It is far enough away to get you to think long-term, yet close enough to seem real. Create a personal vision for your business three years from now. Sit back, close your eyes and let your mind project into the future. Imagine it is three years from now – really try to focus on being in the future. You walk in the door of your organization: What do you see? What are the people doing and saying? Imagine what your business looks like in terms of your employees, your management team, your financials, and yes, you, the entrepreneur. Write that down.
Back to reality, you walk in the door of your organization today. What do you really see? What does your business look like today in terms of your employees, your management team, your financials, and you, the entrepreneur? Write that down, too. Now compare the two lists. What are the gaps between your vision for your business three years from now, and where your business is today? What changes will you have to make in the way you run your business today in order to reach your three-year vision? Finally, review your existing mission statement (you do have one, right?) in light of your new three-year vision. Are the two compatible?
Every business goes through various stages of development. In fact, researchers have identified seven standard stages a business may go through from birth to death. Those stages are:
The Conceptual Stage
Where you identify business opportunities and decide which to follow.
The Start-up Stage
When you actually launch the venture.
The Early Stage
Where you have begun to attract customers, but are still struggling with sales.
The Growth Stage
When your markets and niches are established and you begin to experience real cash flow crises
The Rapid Growth Stage
Some businesses outpace industry growth and you are constantly trying to control growth while not running out of cash.
The Maturing Stage
When sales stabilize and many “me too” competitors enter the market.
The Decline Stage
Where you must either innovate to reinvigorate the business, or face a loss of market share.
Which stage are you in? As part of your analysis of the changes you need to make in your business, you need to evaluate what stage your business is in today and where your three-year vision places it.Your role, as the owner, will need to change, too. The tasks facing the entrepreneur who is trying to grow the business to new levels of performance and profitability are far different than the tasks necessary to run a small business. As the company grows, the entrepreneur must be able to step back from the day-to-day operations and begin to look at the venture in a larger context.
Ten common growth problems entrepreneurs face have been identified by the Ewing Marion Kauffman Foundation of Kansas City in their award winning FastTrac® program. They include:
- Failure to develop a sound business plan
- Failure to attract and retain a talented staff and management team
- Failure to develop marketing niches
- Failure to have sufficient cash
- Failure to control costs
- Failure to innovate
- Failure to monitor and respond to trends
- Failure to adjust to changing markets and competition
- Failure to work through family problems
- Failure to generate new and retain existing customers
The first step to be successful is to avoid failure. More than half of all new business ventures start with little or no pre-planning. The founder merely forges ahead with an idea and a “just do it” mindset, relying on intuition and personal skills. This is one of the key reasons new ventures fail. Successful businesses, on the other hand, concentrate on the following key attributes:
- A solid business plan that guides operations and provides benchmarks for success
- An emphasis on sales and a focus on creating marketing niches
- Good financial records and tracking cash flow DAILY
- Attracting and retaining a talented workforce by recognizing and rewarding outstanding performance
- Continuous process improvement of their management systems, internal communications, and decision making at the operating level
Remember – “What your mind can conceive, you can achieve.” Management Makes the Difference! Happy New Year, and good planning in 2008.
©2007 The Beyster Institute and its authors and their entities. All rights reserved.
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