After meeting with thousands of small-business owners in my career, my experience is that less than 2% of them have an annual plan. Yet when I ask clients what stands out about our work together, while each has a different laundry list, they all include the annual planning process as one of the most transformative elements.
They say things like the following:
— I can’t believe I lived without a plan for so many years. I don’t worry about large equipment purchases anymore because they are in the plan.
— Because I’ve done the work of building an annual plan with my team, I hire with confidence.
— Everyone in our company is clear about where we are going. The energy has never been higher. It’s in the plan!
I am not alone in my love of planning. Here are a few of my favorite quotes:
“You can’t build a reputation on what you’re going to do.” — Confucius
“A goal without a plan is just a wish.” — Anonymous
“Success doesn’t just happen. It’s planned for.” — Anonymous
“For tomorrow belongs to the people who prepare for it today.” — African Proverb
“An hour of planning can save you ten hours of doing.” — Dale Carnegie
“The long way is the short way.” — Ryder Carroll
On average, I find that our annual planning process takes ten to twenty hours of a business owner’s time. In return for this investment, he or she receives three significant returns: team engagement, energetic focus, and time savings—in other words, a lot! Any one of these three is worth ten to twenty hours of a business owner’s year. Planning is a huge time saver and lays a foundation for success.
Here is how annual planning saves time and keeps you focused. By taking the time to lay out exactly how you expect the year to go, your monthly financial review is about comparing results relative to your plan. If you are “on plan” or better, super! Keep doing what you are doing. Serve up a “Way to go!” and get back to your personal priorities. If you are “off plan,” go directly to the person who is responsible for that section of your plan and talk with him or her about course correction. Mutually agree on what is needed, whether it’s more digging into the issue, taking immediate action, or some mixture these two things, along with a time line. Each month you’ll see if the changes you made are working relative to your plan.
Business owners without a plan compare their progress to last month or last year. Was last month or last year so fantastic you can’t imagine doing better?
Last year is a terrible measure by which to gauge your success. If your industry is growing at 15%, then you must grow at 15% or more just to keep your current market share. Without a plan, you and your team are high-fiving yourself over keeping pace with the economy. With planning, you’d expect a minimum of 15% growth, and you’d measure the business against that yardstick. On the contrary, if your industry is contracting, without a new strategy, you are going to find yourself in downsize mode was well. Planning may very well be your key to survival.
A business is a dynamic organism, and, as such, it is always evolving. There is no such thing as a business that doesn’t need improvement somewhere! Even if last year was your best ever, there’s some part of your business that is lagging. By making a time investment in a plan, you can quickly and easily identify and course correct for the lag.
Don’t be one of the 2%. Lower your stress, engage your team, focus your energy, and save time by beginning each year with clear goals and a plan to achieve them.