The end of the year is both a time of reflection and a time for projection; what have you done over the past year to create value in your life and in your business; what do you resolve to do in the coming year to improve that value. This is the time of year people make resolutions to lose weight, get fit, and generally do things to better themselves and their lives. If you’re a business owner you should be thinking about these same things for your company… what are you going to do in the next 1-3-5 years to better your business and your life?
Strategy planning is where you should start. But it’s not all about your business strategy. If you’re a small/medium sized business owner you’re likely an integral part of your business so the idea of setting resolutions for your business will impact you personally. Depending on your strategy, and how you implement it, you may, in fact, end up working more, working harder, spending less time with family, etc.; all things you probably wanted to improve in your personal life in the new year. So, thinking about your strategy should include how it will impact your life.
Now, when business owners hear the phrase “strategic plan” or “business plan” they often think about these concepts as complicated, rigorous, time-consuming (maybe even time wasting) efforts that large corporations undertake at a corporate level, a divisional level, and at a department/team level with the work of the team rolling up in support of the overall corporation. They think of rigid structures, long meetings, and, if they’ve had experience in a corporate environment, have probably experienced the actual outcome of strategic planning sessions as being a “book” that sits on someone’s desk – I know I have seen that before. That is not what your planning process or outcome should be. Your efforts should be practical, project-based, and actionable. After all, unless you execute your strategy it will become what you feared – wasted time to create a book on your desk. So, let’s walk through a few things to help you develop a project-based plan that is practical and that you and your team can execute.
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At the highest level, you might want to think of your strategy as a mountain with three peaks. The pinnacle of one peak is “cost reduction”; the second is “revenue growth”; the third is “self”; and the bridge between them all is value creation. In your business, you should be thinking about how to maximize the first, minimize the second, and take care of the third with the goal of generating greater profits for your company, freedom in your life, and building the bridge to generate greater value in your business. You can think of “losing weight” (a personal resolution I have this year) as reducing costs in business terms, “getting fit” as growing revenue, and addressing your role in the business as “improving your life” with the bridge between the three creating value and happiness.
With the first peak in mind, think across your business operations. Where/how are you spending money? When was the last time you reviewed your supplier list? Are you getting the best payment terms? Is your supply chain diversified? Are your suppliers giving you their best pricing? How about the services you use? Can you consolidate (or diversify) to get better pricing? Are your processes/operations as efficient as they can be? Do you have too much waste or rework in your production cycle? What about the time in your day, are you making efficient use of it or are you wasting time? Are you, as the business owner being as effective as you should be working ON your business rather than IN your business? Remember, cutting costs is not always about stopping something. You may need to do something new or just update how you’ve done it in the past.
Thinking about the summit of the “revenue growth” peak, again ask yourself where and how you generate revenue. Can your product line/service offering be expanded? Would what you sell, sell in different regions or to different cultures? Who is your ideal customer and how can you reach more of them? How are prospects traveling the customer journey (learn about the Marketing Hourglass here); is it an enjoyable journey? What are you doing to create loyal, repeat customers? Do you have a referral program? Are there products/services your customers might like that compliment what they already buy from you? Remember growing revenue is not always about adding customers, products, or services...one question might be, are you charging what you’re worth, should you increase your pricing to improve margins? OR should you decrease what you charge to gain market share? OR do you completely change your model – i.e. can you implement a subscription model for what you sell?
The final peak – “self” – is about your role in the business. You should consider what it is you’re doing that keeps you from achieving “better health” in terms of your work-life balance. Are you developing a core leadership team? Are you the bottle neck in decision-making? Does your team know the direction of, and vision for, your business? Will your business continue to be successful without you? Is your team empowered to make decisions? Do you have a culture that makes your team feel safe to act independently? Can people fail successfully without fear? In the end, are you developing an owner-independent business that can successfully fulfill your mission without your day-to-day, hands-on involvement? If these considerations are not part of your strategy and planning, then it is likely that the direction you take your business in the future will create a life for you and your family that falls short of healthy and fulfilling… you’ll miss the good things in life because your life is your business.
Note, there may be some questions that address all peaks – cost, revenue, and self. Those might be questions in terms of staff/human resources. Do you increase training in an effort to grow revenue? Do you cut some benefits to reduce costs – i.e. are people really participating in the weekly yoga class? Do you hire staff to whom you can delegate your work?
WOW… that’s a lot of questions, and I can tell you that there are so many more. But the good news is there are no bad questions, bring them all to the table. What’s important is to begin to ask questions… get your team to start asking questions – how can we reduce costs and generate more revenue? Ask yourself, where can I delegate to create more time for myself to work on the business rather than in the business? A facilitator can help with this questioning exercise, but asking these questions is an ongoing effort. Present your team with a challenge to come up with questions. Make it a game, give a prize to the person/team that brings the greatest number of unique questions. Bring them together and put all the questions on a board and then discuss. Upon discussion, some of these questions might merge with others, some might be refined, or the discussion about one may spark yet another question to be answered.
Asking questions is just the beginning. Before you begin to answer your questions, you need to look at each and prioritize them… which are the most important to answer first? How you prioritize is unique to your business, but you should write your prioritization criteria/rules down and apply the same criteria to all questions or use a system of voting among your team. Your prioritized list should give you an indication of which questions to answer first.
With a prioritized list of questions across the cost cutting, revenue building, and self-awareness peaks, start thinking about the answers to the highest priority questions. Note, there will likely be more than one answer to many of the questions. At this point, you might be able to guess what the next step is… prioritize your answers. These answers will be the key to executing the tactics to implement a strategy for cost reduction, revenue growth, and balance in your life. The answers will be implemented as projects. Outline the projects that will put into action the answers that address the questions in a positive way for you and your business.
There are many approaches to building a strategy and plan for you and your company. I use this Goals > Questions > Answers > Projects approach because it’s practical, effective, and actionable. Business owners can relate to the goals of cutting costs, growing revenue, and work-life balance. We can easily tie the actions/projects being undertaken in the business with a question that is answered to make the business more valuable. There may be other goals you wish to add to the cost cutting and revenue generating ones I’ve listed. If that’s the case, go for it. You can apply this same approach of goals > questions > answers > projects to whatever goal you wish to reach to grow the value of your business.
I’d love to hear from you. Let me know about the resolutions you’re making for your business and self in 2018. Share the approach you’re taking to implement a strategy to achieving your goals. Leave a comment below, or contact me directly at MarkM@DTLVmarketing.com.
Happy holidays and have a safe and happy New Year celebration. In 2018, I'll begin to ask and answer some of the questions I present above.
I have been in project management and process improvement for over 15 years working for large and small for-profit companies, associations, and not-for-profit organizations. After working in hospitality management for over 10 years, I underwent a career change moving into technology, working for GE. It was there I began working in project management and process improvement; training with GE's Six Sigma program. Later my career had me working with Constellation Energy in Baltimore, Caesars Entertainment in Las Vegas, and eventual transitioning into consulting working for federal agencies and most recently an industry association in the utility sector. I enjoy working with and helping small and medium-sized organizations build value in their business through strategy, project execution, systemization, and marketing.
Strategy without tactics is the slowest route to victory; tactics without strategy is the noise before defeat. - Sun Tzu, Art of War