“If you kids don’t stop fighting, I’m going to turn this car around!” We’ve probably all heard that oft-repeated threat from a parent. And maybe even said it to our own caterwauling children.
As a child, hearing that ultimatum was duly horrifying. We couldn’t possibly miss out on the ice cream/birthday party/soccer practice/dance recital. In ‘Reverse’ was a place we didn’t want to be. As adults, however, that direction is looking exceedingly appealing.
But, unfortunately, when it comes to business…we cannot turn this car around. ‘Drive’ is the only gear available to us, and as long as we’re moving forward, we should know where we’re going.
This New Year, make a resolution not only to shed pounds or finally redesign your kitchen or be more patient. Resolve also to make your business stronger and more profitable with an intentional strategic plan.
Below, the cash management experts at Provident Bank share what to do when developing your business’ roadmap for 2014.
Just like every car comes with an owner’s manual, every strategic plan comes with a mission statement. Your organization’s mission statement should serve as the foundation for the four W’s (and an H): who your company is, where it serves, what it does, why it does it and how it does it. It should drive every decision your team makes — from executive management to entry-level employees.
Take pride in your business’s mission and—as you would with a shiny new car — show it off! Make it an integral part of trainings and orientations; put it in a visible place. Every single employee should buy into your business’ story, deeply understand its values, and communicate its vision to the public.
A strategic plan is, fundamentally, a plotting of your business’ course. It allows you to set priorities and identify ways to grow. You should outline practical, actionable goals for the future (e.g. improving margins, increasing B2B revenue, expanding into a related market, broadening your product/service offerings).
Your GPS route should explain exactly what your business wants to achieve and where it wants this journey to end.
Invariably, you will hit road bumps and encounter detours along the way. Do not be afraid to take alternate routes or correct your course. In fact, you should re-evaluate your goals monthly or quarterly.
You can’t know where you’re going until you understand where you’ve come from. Take a look in the rearview mirror and assess what you’ve done in the past, what’s worked and what hasn’t.
It’s beneficial to conduct a SWOT, an analysis of your Strengths, Weaknesses, Opportunities, and Threats. This allows you to paint a picture of where you stand, how many miles are left in the journey, and the opportunities available to you. It also helps you to identify obstacles and creative ways to overcome them.
Get an oil change, have your tires rotated, check your engine: take action to make sure your car is in working order.
Similarly, even the best-laid plans are useless without polished execution. That’s why it’s so important to create an operations plan, which breaks down your “big goals” into smaller projects — made up of clear, bite-sized steps — with a series of deadlines.
You should hold individual people with specific skills accountable for specific tasks. Basically, who will do what and when? Create a calendar or chart, which maps out when projects begin and end and who’s leading them. Then decide how you will track the projects’ progress.
Conduct an industry analysis to measure the size of your market, whether or not it’s growing, and the opportunities and threats that exist. You can find market information through chambers of commerce, industry associations, business contacts, census data, etc.
Know who’s on the road. Size up the other cars and pinpoint your key competitors. Ask yourself these questions:
A strategic plan is a dynamic, evolving, continual reassessment of your business, so the journey never really ends. You’re always looking toward the future, planning the next trip.
The final section of your strategic plan includes your financials, both indicators of past performance — income, cash flow statements, and balance sheets — as well as future projections — a three-year forecast of profit and loss, and a break-even analysis, which calculates how much revenue you need to offset your initial investment.
Ultimately, you’ll need to have an understanding of how much your business is poised to make and whether or not your cash flow will be a steady stream.
So break out that old accordion map from the glove box (we know you still have it) and, with vision, creativity, and insight, plot your road map for 2014!