Planning for Success

Martin Riley - Business Coach - The Business Jet Engine

To ensure your planning is a success, it is important to consider why so many businesses fail.

The UK Government Office for National Statistics reports that the five-year survival rate for businesses that launched in 2009 and remained active in 2014 was 41.7%. Meaning:

Almost 60% of start-ups fail within five years.

From experience, most businesses struggle due to one of the following:

• Insufficient cash
• An inadequately thought through business model
• A lack of competitive advantage
• Poor planning
• Trying to change too many things at once
• Changing nothing due to uncertainty and overwhelm

The last three relate to unclear thinking and a lack of practical plans. To address this issue, you need to know how to create simple plans.

If you are a time-stretched business owner, these are of great value by being:

• Focused only on what is important
• Focused only on what is achievable
• Quick to create
• Quick to review
• Quick to update

Be aware that a major mistake when planning is getting bogged down in the details too soon. If you try to include every factor which may appear relevant, it:

• Slows the process
• Introduces too much uncertainty
• Obscures the big picture

You need to see the big picture first, using approximate figures and estimates, to reassure yourself that you are heading in the right direction. Clearly, if you are heading in the wrong direction, adding infinite detail is a waste of time.

Once you are confident of your direction, you can increase the accuracy of your figures, evolving from annual priorities, into quarterly plans, then manageable monthly tasks.

Three concepts for creating simple plans that work for you.

The 80/20 Rule

The 80/20 rule suggests that 20% of what we do produces 80% of the results that we want. The proportions may not always be exactly this; it may be 70/30, 60/40, 90/10. The exact ratio is not important. The key point is there is a disproportion of effort to achieve a result.

The key to using the 80/20 rule is to identify the 20% to improve that will affect 80% of your results.

To do so, answer these questions:

• What is most effective in producing the results you want?
• Can you increase this or do it more?
• What is least effective in producing the results you want?
• Can you decrease that or do it less?

The Power of Threes

When you create your annual priorities, ideally limit them to three. If you have less than three priorities, insufficient progress is made. More than three, and it becomes hard to focus. In addition, you want to engage your staff in your plans, and most people do not easily remember more than three things.

When everyone has your priorities in mind, these act as a focus against which all decisions are made.

Strategic Goals vs Day-to-day Goals

Do you know the difference between a strategic goal and day-to-day goal?

• Day-to-day goals are what you normally do to make your business work
• Strategic goals fundamentally improve your long-term prospects

With your day-to-day goals, the backbone of your current business, you should always be looking to make small incremental improvements. Strategic goals require a more significant change. These are where you aim to make a significant difference a year or so from now. 

The key here is to ask:

• What are the areas where I am weakest and really need to improve?
• What are the areas where I could grasp the greatest opportunities?

It can be hard to have confidence that any plan is exactly right. This is a fundamental challenge of leadership. How to proceed when there is uncertainty. The future is rarely predictable. Sometimes, it is like feeling your way forward in the dark. You can never be fully certain what lays ahead until you get there. 

You must do your best to plan using the information you have. Further information will reveal itself as you get closer to your goal, allowing you to adapt your plans as you proceed. As your experience develops you will gain more insight as to what to expect on the same or similar routes in the future.

In the end, you need to take a deep breath, have courage, and give it your best attempt.

Martin Riley - The Business Jet Engine®

If you feel uncertain what to do next, take a look at the free business planning tools on this site. Just click here.