8 smart ways business leaders can plan for success
Entrepreneurs tend to be “ready, fire, aim” people.
“We often don’t make the best planners. We are action-oriented people,” says Bill McBean, the founder of several successful businesses and author of The Facts of Business Life.
That’s why it’s vital to step off the day-to-day treadmill and plan for your company’s growth. McBean suggests you approach planning by what you do internally (with processes, employees and yourself) and externally (with customers, marketing, etc.).
Internal planning
1. Evaluate your leadership. If you don’t improve your leadership skills, there is little chance your business can improve, says McBean. Being a great leader begins with a self-analysis of your leadership ability.
Do you supply the business with what it needs to be successful—the right equipment, your focus and required capital? Do you have the right people in the right chairs? Are employees being paid based on what you want them to accomplish?
“Without effective leadership, your employees have no idea what is important, what to manage, or what success and failure look like … and this starts with the owner,” says McBean.
2. Perform a top-to-bottom walk-through of your systems and procedures. Examine which processes are working, which need to be improved and which processes are outdated and exist only because “it’s the way it’s always been done.”
For example, your inventory has to change with the market, as do your pricing policies. Inventory and pricing parameters change because what sold well a year ago may have little demand today.
Your competitors’ pricing changes constantly and so must yours. Your systems and procedures must be able to keep up with these changes.
“If you’re not controlling your procedures and processes, you don’t really ‘own’ your business,” notes McBean. “You’re just a spectator watching others play with your money. Rededicate your business to upholding important processes.”
3. Kick off a cost-cutting, gross-profit-building mission. This is a powerful weapon for an owner. Look for ways to increase gross profit and cut costs, as they have a dramatic positive effect on profits and cash flow. For example, look for easy “to bolt on” gross profit opportunities, and get creative when looking at your costs.
Don’t assume you know how much things are costing, or that your employees are reacting to new sales opportunities. For example, you may not have to make cuts; you simply need to renegotiate vendor contracts.
Ask yourself: What expensive mistakes have been made in the past? How can we avoid making them again? And what can we do to increase bottom- line profits and increase cash flow?
4. Re-engage employees. In this economy, you need employees who care about your business as much as you do. “Engaged employees are energized,” says McBean. “They handle problems on their own and actively look for ways to improve the business.”
To get employees engaged, show them you care. Sometimes it’s as simple as saying “thank you” for a job well done—either orally, with an instant cash bonus or a day off. One thing that worked well in his businesses: supporting the activities that his employees’ kids were involved in.
5. Set high, but realistic and specific goals. If your goals aren’t measurable, you won’t be able to gauge your progress. Eventually you’ll stop pursuing them. Setting realistic goals, putting a plan in place and routinely checking in with employees is the best way to be successful.
“Successful owners know they have to fight not only to win market share but to retain it as well,” says McBean. “You have to constantly be setting and reaching goals to keep your business moving forward … It’s just the law of the marketplace jungle.”
External planning
6. Boost your product/service offerings. Think about what you can do to squeeze out another product or service offering with what you already have in place. Make it easy for your customers to get what they want.
7. Revamp your marketing campaign. Think about who your customers are. Are you marketing to them in a way that makes sense?
“Your attention should be focused on what products are selling, where your customers go for information, who purchases your products, who are the easiest customers to attract, and which products bring the most gross profit,” says McBean.
8. Find new ways to impress loyal customers. Don’t assume they’ll continue to be repeat patrons. The prize goes to the owners who become more creative and don’t offer just the expected.
Final thought: “By taking the time right now to plan ahead, you’re making big opportunities possible for your business.”
