Pilots consistently get to their desired destination, but some of us are still circling the clouds. Now is the time to file your business flight plan for 2011, to make sure you arrive at the right place next year.
Imagine an airline pilot who didn’t file a flight plan. He just jumped into the plane, told the ground crew to gas it up and pushed back from the gate. After take off, he whimsically went left or right, up or down, following the sun or clouds through the air. Maybe a customer would ask him to head somewhere, or the air traffic controllers would suggest a route. Frustrated flight attendants might jump into the co-pilot seat and take the controls, steering the plane – and the pilot – back on course for a while. The pilot might even find his way to the destination, but he would have used up a lot of time, energy and effort, not to mention made a lot of people unhappy along the way.
That’s what happens to businesses and salespeople who don’t have a business plan. A few are successful in spite of having no plan: Most are not. Less than 10% of REALTORS made more than $100,00 last year; most earned less than $35,000. The top earners tell us they have clear goals and written plans. The rest just come to the office (or not) and react to calls, emails, other people. They take the whimsical approach to selling. And while their job isn’t has hard as flying an airplane, they make it that way because they have no flight plan.
If you’re not satisfied with the outcome from last year, maybe it’s time to file your business plan. Here are four easy steps to help you do it.
- Identify your goals
- Determine the budget
- Work with your strengths
- Do the good
The first step in running a business is to know why you’re doing it. What are you trying to accomplish, create, or make happen? This isn’t how much money you want to make: Money is just a means to an end. So what’s the end-result you want to achieve by working in your business? Goal planning means identifying the rewards of your efforts. It can be personal or professional or social or all of the above. Goals can be straightforward – such as putting a kid though college or saving for retirement. They can be visionary – trying to change the way people live their lives or the way your industry operates. It doesn’t matter what your goal is, but it does matter that you have a clearly defined goal. Otherwise, avoiding the work required each day will be easy. Nobody works hard for no reason.
With goals in mind, the budget is fairly easy to determine. How much money will it take to achieve your goals? Budgets include income and expenses. Identify how much you will spend as well as how much must earn to reach your goals. As you start budgeting, you’ll notice how other things fall into place. Your expenses set the conditions of your operations: training, technology, marketing, hours at work, even the company you decide to work come from your expense lines. Your budget also sets your income costs (price to customers). The price you charge isn’t some number you just make up, or copy competitors. Your price is set by the amount of income needed to offset expenses and pay for your goals. With expenses and income in writing, it becomes much easier to determine which customers to pursue, what tools to use, and how to evaluate good or bad business opportunities.
Build an action plan around your strengths. Most of us can list things we’re bad at doing, then come up with plans to fix them. Few of us every overcome what we’re really bad at, though, with the budgets at our disposal. And nobody like to work on their problems every day. The better approach is to figure out what you’re good at, then writing an action plan that leverages those talents. Imagine how much fun it will be to do what you’re good at, what you enjoy, and what comes naturally every day. Plus making money at it! Make a list of two or three strengths, then write an activity list that uses those strengths. Daily activities – prospecting, servicing, closing deals – must be congruent with your talents. Don’t worry if someone else in your company is doing something different: They have different talents, and will perform different activities. You can only be successful if you focus on your own strengths.
Finally, do the good. You know what the good is: you don’t need anyone to remind you. You know a good deal when you see it and a bad one, too. Successful people learn to resist bad business. They avoid or eliminate wasteful spending, bad marketing choices and time-consuming customers who represent hurdles, not clear paths to their rewards. They learn to take positive action when they “know” they are doing the wrong things. This comes from goal clarity and an understanding of your strengths. But ultimately, it will require hard decisions. Doing the good is hard. It means not going along with everyone else or challenging “common knowledge” all around you. Imagine how comfortable and certain you will feel working with clients, colleagues, even companies, when you decide only to only do good business every day.
Business planning can happen on one sheet of paper. Divide it into four quadrants, collecting your answers for each of these four steps. On one page, you will see a picture of what it will mean to run your business next year. Flip the paper over and try writing a few sentences that describe your picture. Connect the dots between your goals, budget, strengths and sense of good. Or write down a few key words that encapsulate your plan, such as “Focused” or “Profitable” or “Time” or “Having fun.” Post these words in places you’ll see daily – your bathroom mirror, the background of your smartphone, on your desk – to keep your plan in mind as you make daily decisions.
Your business plan doesn’t have to be complex or perfect. It’s not supposed to be a detailed analysis or a complicated formula. It won’t outguess the market or even care about the competitor (focusing instead on your goals and customers). But it will be the benchmark tool that guides each and every day. Your one-page business plan is like your flight plan: Once you file it, you’ll know exactly where to go to get to your destination on time.