When I visit business owners, it always amazes me how little monitoring they have in place to ensure key tasks are performed on time. Most tend to use a mental check list, which is usually disorganised and frequently forgotten.
Growing businesses need structure and detail in their organisation, in order to remain on track and complete key tasks in their growth plan on time. This article introduces a business growth and development process I use to identify and map out the key present and future results the business owner wishes to achieve, together with the timescales.
The process follows my GOSTE system to success:
- Goals – this is the big picture end goals
- Objectives – breaking down the big picture into smaller bite-size, manageable chunks
- Strategy – the overall game plan to achieve the goals
- Tactics – the day to day shifts required to achieve the strategy
- Execution – action is the key! Without it, NOTHING happens.
Reverse engineering your business for success
What is reverse engineering? It’s a simple method I use to understand the long term goals of the business owner and then bridge the gap to the present. Here’s how it works…
Let’s say a business owner wishes to grow their business from £100,000 to £500,000 in sales, with a net profit of 10% in five years. It’s important to consider profit and not just sales.
Why? Turnover alone does not mean a business is viable. Profit pays the bills, providing it’s turned into cash.
In this example, the business owner is seeking a 500% growth in their business in a relatively short time scale. Is it achievable? In most businesses the answer is YES! So what’s the first step?
Look at the business as if it has already reached its goal.
· What has changed?
· How many staff are there?
· How many customers is the business serving?
· How many products or services is the business providing?
· Where is the business located to fulfill all of these targets?
Once we have this key data we can map out a potential profit and loss forecast to understand the key costs to the business, and challenge whether it’s feasible to achieve the profit target. If it is, we move to the next stage…
At the moment we have an end goal. Presuming the business gains some growth momentum within the five years, it’s sensible to assume that it will grow faster in the latter two years compared to the previous three years. With this in mind, let’s reverse engineer to the end of year four and repeat the exercise. We now have a target which is realistic and achievable, fully understanding the work involved.
This process is repeated until we reach the one year goal. This is the tough one. This is the clear view ahead where we compare the current numbers with the year one projection. The projection is then challenged to understand and agree if it is realistic to achieve. It’s fine if the target is stretching, so long as it’s achievable.
From this one year target we break the year down into quarters, and then again into monthly targets.
As you can imagine, the business owner now has a monthly target to achieve. A detailed action plan follows presenting a list of all the tasks that must be completed for the business to achieve the first target. This is the first discipline that must be repeated every month for the next five years, even if it has to be done outside of business hours. This must be allocated to key personnel even if the business is small, or run by just one person…you!
Note: Build in a suitable lead in time to allow for organisational changes to be applied and to complete the action plans.
An introduction to action planning
Action plans are very simple to use. They act as a reminder of the important work to be completed which falls outside the day-to-day operations of the business. These are the key drivers of the business success.
As every element of the plan can be broken down, we introduce action plans to ensure they are followed through and completed correctly. An action plan merely contains the following:
- Objective – what are we doing?
- Timescales – when must it be completed?
- Who completes the tasks?
- Who manages/supervises the task?
Of course, you can create a form for each task, retaining a copy in the master plan file. This contains all of the action plans for the detailed management overview. Smaller businesses may not require this although I recommend it so that copies are always retained in one place and then become easier to monitor.
As there can be many tasks associated with completing one objective, it’s important to introduce a robust monitoring system…
The strategic diary
This is the important diary that sets the target deadline for each and every action plan to be completed, together with the details of the target to be reached in the period. It’s an invaluable tool and allows you, the business owner to review how the business should be performing at any given time within the big game plan.
So now you have the huge goal, the key monthly objective, a detailed action plan, and a monitoring system in place. What else is there?
Rewards and incentives
To drive your business forward, you may find that you are asking a lot of your team to perform duties over and above their daily tasks. Hopefully, most of the tasks contained in the action plan can be performed during the working day and simply integrated into daily routine. Some people do not like change so you need to consider whether specific rewards, bonuses or incentives must be introduced to help the process along. They may not be required but, as a business owner, if you really believe in the team sharing in your success and buying into the program, then this could be a good thing.
If you have a good team and they are excited by the prospect of the work ahead, then you’ve made good recruitment decisions. Others may not be so fortunate and therefore you will have to deal with the more negative elements within the team.
Prepare to adapt
Five years in business is a long time. So much can change for the better or worse. You must be prepared to adapt your game plan to respond to these changes. Change can be good and may emerge as opportunity. This could be one of those “too good to miss” opportunities that come early in the game plan – an unexpected bonus or maybe unplanned bonus. When this occurs, you need to re-evaluate the game plan and take decisions to adapt, re-focus and then look ahead at all the targets you have set. Re-set them and your end goals to reflect where you are now.
This process I have shared with you has been used successfully in numerous industries. It is simple to understand and employ, although will require considerable administration initially, hence my suggested lead-in time. Following this you need a disciplined approach and a good monitoring system.
As a business owner, you will always be watching for opportunities and threats to your business. The good news is that when you become excellent at strategic and tactical development, your business becomes more adaptable to change. You will also be able to evaluate whether an opportunity is worth taking and would add value to your business, or is something to miss because it falls outside of your current long term strategy.
Following these steps will not guarantee success, but I guarantee they provide a solid framework for growth which leads to success, if applied in detail.Discover a simple, yet effective business growth process to keep your business on track Click To Tweet