Step 4: Make a plan
So, to recap the first three steps: Step 1 is getting clear on exactly what you want, Step 2 is about being open to change and Step 3 is knowing, warts and all, where you are right now. You’re now ready for the next step – making a clear plan.
Remember that the business is there to serve you, not the other way around. You shouldn’t be a slave to your business. So, refer back to Step 1 where you recorded who you want to BE, how you want to work, and the hours you are prepared to put in. Build your plan around what you want personally from the business.
Let’s work through an example of this.
If you need $100,000 per year to cover your living costs and that family holiday, and you know your overheads are currently $100,000, then you need a gross profit of $200,000.
If your current gross profit margin is 50%, then your annual sales need to be $400,000 (or $8,695 per week if you plan to work 46 weeks per year).
You can see now why you need to understand your current situation. If you can improve your margin by 2% to 52%, you only need to make $8,361 in sales per week.
This budget should form part of your plan. Make sure your plan is linked directly to how your business will deliver on your personal goals.
Follow these rules for creating a solid plan:
- Keep it on one page. Two sides if you must.
- Identify no more than four main goals for the year. If you have too many goals, you’ll struggle to achieve them effectively.
- Cascade your annual goals into 90 day goals. Identify the actions you need to complete in order to achieve those goals.
- Identify no more than five Key Performance Indicators. Any more and you’ll lose focus.
- Share the plan with your team. Their personal career goals should be linked with your plan. Help them to define their own actions and KPIs. These should be recorded in their job description.
- Keep the plan highly visible to your team. Track your progress against your plan and celebrate success along the way.
- Review your plan at least quarterly. Have someone independent hold you accountable.
Remember, “a dream written down becomes a goal. A goal broken down into steps becomes a plan. And a plan backed by action makes it reality” – Greg S Reid.
Your Business Plan is your ‘how to guide’ to achieve what you want in your life. It’s the most fundamental document in your entire business. How good is yours?