We have just finalized our business plan for 2021. An annual business plan or operations plan is a key document for any business. All the large corporations I have worked for had planning sessions where we would go offsite for at least a week to plan for the next period. It’s a good practice as a business owner/manager to have a written plan for your operations. A written plan allows you to continuously evaluate performance against set metrics. It also enables effective problem analysis and resolution. A written plan clarifies your vision and strategy for the next period. It also helps to focus the team and resources towards a shared goal.
There are three basic steps in coming up with a business plan.
The first step is to understand where you are. At this step you review the past performance, what worked, didn’t work, challenges, wins, etc. You also do a detailed financial review to understand how you have performed. You also scan the competition, and any opportunities for growth. You reflect on the organization’s strengths, weaknesses, opportunities, and threats. You also perform a comprehensive risk assessment of your business and identify mitigating actions.
The second stage is to determine where you want to be. You set your goals for the coming year. The goals should be SMART (Specific, Measurable, Achievable, Relevant, and Time bound). The goals should cover all aspects of the business including customer, financial, processes and people metrics. A sales projection for the next period is also developed at this stage.
The third stage is to determine how you are actually going to achieve your goals. You have to come up with a series of steps or activities which you will do on a daily, weekly, and monthly basis to achieve the big goals. Timelines should be attached and responsibilities assigned to different team members. At this stage you come up with a detailed budget to execute your plan. You also come up with a resource mobilization plan to finance your operations.
Once you’ve developed the plan you need to share it with the team and bring them on board and get buy in. The company goals should then feed into the individual performance contracts for employees. The performance contracts specify what each employee is expected to achieve. The performance contracts feed into the appraisal process which ultimately ties into your remuneration strategy. Once you tie incentives like promotions, bonuses, etc. to performance you are more likely to achieve the business goals you set out.
The role of planning and performance management should be assigned to a senior member of the team or the business owner herself. Monthly performance reports should be prepared to check on progress of implementation of the plan. These monthly reviews will inform any necessary changes to the plan.
Having a written plan will improve the odds of success in this uncertain business environment. It should be of utmost priority for all business owners to have a written plan before heading out into 2021. You sacrifice so much as an entrepreneur and you can’t afford to run your project in an informal and adhoc manner.