Business Planning (Part III)
The Seven Steps of Common Sense Business Planning
5. ASSEMBLE FINANCIAL DATA
After all the dreaming and planning, you have to express all those dreams and goals in terms of units, dollars and time. This cannot be left to financial experts. Your accountant is not trained to recognize opportunities that will help you achieve your dreams and goals. In fact, they might become organizational barriers to your attaining and sustaining success.
The numbers on the CASH FLOW PROJECTIONS and PROFIT & LOSS PROJECTIONS serve double duty. As guides to the future, they quantify the sales and operating goals, including use of personnel and other resources expressed in dollars and time; as control documents they provide the basis for cash flow and operating budgets. Use them on a periodic basis (monthly and year-to-date summaries) to measure progress towards the goals. Timely measurements allows you to change operations if problems (or opportunities) arise.
The BALANCE SHEET displays what your business owns and what it owes, and how those assets and liabilities are distributed. Compare these patterns with industry figures- and PROFIT and LOSS figures as well- to get another means of seeing how well your business is performing.
Financial statements are designed to help you make better business decisions. USE THEM!
DO NOT LEAVE THEM TO YOUR ACCOUNTANT; THEY ARE FAR TOO VALUABLE AS SOURCES OF IN FORMATION AND CONTROL. THEY ARE YOUR COMPASS FOR STAYING ON-COURSE.
6. REVIEW FOR CONSISTENCY, COHERENCE and CONTROL
A complete and coherent plan, one that leaves no large area uncovered can make the difference between success and failure. From a banker’s viewpoint, completeness and thoroughness are so closely related that an incomplete plan is a danger sign.
A coherent plan fits together: one part leads to the next; the flow is clear and direct (and easy to manage, a huge benefit to any business). A plan starts with where you are, takes you where you have been into account, and shows you where you go next.
Key question to ask at all stages is:
DOES THIS MAKE GOOD BUSINESS SENSE and WILL IT WORK?
Even a tentative NO should be carefully examined. You want your plan to be SMART!
Specific, Measurable, Attainable, Realistic and Timely.
7. IMPLEMENT, REVISIT, REVIEW and REVISE AS NEEDED
Regardless how well a plan has been written, nothing happens until it is implemented.
Nothing shows the weaknesses of a plan faster than use. The failure of a plan makes the problem easy to spot. It’s no accident that most business consultants begin the process of assessing a business by preparing a business plan, perhaps limited to resource review, cash flow and sales projections- in order to get the immediate problem(s) and evaluate h the best method for helping the client.
A plan that gets tucked away on a shelf is as helpful as a compass that is discarded before sailing into a thick fog. Your business plan is a navigation system. As Michael Gerber says in his book , THE E-MYTH, the system is the solution.
Your business plan is your system for success. It provides a destination (the objectives, checkpoints (the goals and benchmarks of the projections), a chart of the surrounding terrain and probable problems (the plan itself) and a means of determining whether or not you are ‘On-Course”. The CEO’S Compass, which you will learn how to use after creating a clear and comprehensive plan, will help guide you attain and sustain success in all situations.
Use your plan. Review and Revise it as experience dictates. You will realize that it is an invaluable resource. I t helps you become clearer about where you are going and makes getting there far more fun and easier.
REMEMBER: DISCIPLINE or DISASTER: IT’S YOUR CHOICE!
PLAN YOUR WORK,WORK YOUR PLAN!
Nick Callazzo has more than 30 years of experience consulting to banks, insurance companies and financial institutions as well as coaching executives to help them improve their personal and professional performance. In 1985, Mr. Callazzo founded Resource Specialists, a consulting group that focuses primarily on helping companies identify behaviors that impeded either organizational or personal success. A former U.S. Marine, Mr. Callazzo is currently working with FastTrac’s Entrepreneurial program for veterans in order to help them improve their business acumen and, possibly, their profit margins.