If you’re like most business owners or entrepreneurs, chances are you’re thinking one of two things right now—in regards to your plans for next year. With only 24 days left in the year, you’re either thinking, “Oh no, I’ve got to hustle to finish my plan in the next two weeks!” or “Oh crap, there are only 24 days left before the start of the new year and I haven’t even begun to work on my plan for next year!”
However, regardless of which response is more true of you, there are three very real and common planning issues that you need to be aware of that can affect your outcome—and your ability to rapidly grow your business in the coming year. So, if you’d like to avoid the top three mistakes that most small businesses make when they create their annual growth plan (or strategic plan), then you’ll want to keep reading.
The top three reasons why most annual or strategic plans don’t work are …
- Adding a new product/revenue stream
- Moving to an adjacent market
- Cutting out a product/service line
- Narrowing down a niche
- Adding a new distribution channel (or distributor)
- Acquiring a competitor
- Creating a better back-end
- Raising prices and going after more ideal buyers
- Moving to a continuity/subscription model
- Creating a new competitive advantage
- Establishing a new joint venture
- Franchising or adding new locations, etc.
1. They’re Not Very Strategic
This is, by far, the number one mistake made whenever a business begins their annual planning process. Why? Because most business leaders don’t want to take the time to think strategically. And why is that? Because it takes time. It’s so much easier to simply take last year’s plan and figure out, “How much better can we do what we did last year?” In other words, most “strategic plans” are simply repeats of the previous year’s plans with a couple of small tweaks.
However, strategy is not about repeating the past. Strategy is about creating something new. It’s about the future. It’s about deciding what you want to be at X time in the future (usually 1, 3, 5, and/or 10 years out). And who you want to be, may not be at all who you’ve been.
Apple started as Apple Computer. It’s now simply Apple. Why? Because computers are a small part of their revenue these days. Music players, cell phones, tablets, and music distribution now dominate Apple’s revenue streams. If Apple simply created their plans like most businesses do, they’d still be primarily a computer maker (if they were alive at all).
If you want to think strategically, you need to consider strategic moves like
None of those moves above are about simply doing what was did last year, just a little bit better.
So, if you want to create a plan that’ll rapidly grow your business next year, make sure you take the TIME to do some strategic thinking. Make a couple of big, bold decisions that have the potential to radically grow your business. If you do, you’ll have a better shot at doubling your business.
2. They’re Not Very Tactical
In other words, the second most common problem with most small business plans is that they’re too “pie-in-the-sky”. Why? Again, because most small businesses don’t want to take the TIME to do the hard work of figuring out how to actually implement their plans.
It’s so much easier to simply write a big plan and say, “This year, we’re going to introduce two new products,” and move on. Or to write, “This year, we’re going to open up a new location,” and move on. Or, “This year, we’re going to move to a subscription model,” and move on.
To me, this is like the typical gym or book problem. When someone buys a gym membership, they mentally think, “Since I bought a gym membership I’m making progress toward being healthy.” The problem, of course, is that until you actually go to the gym and work out properly, you can’t make progress.
Likewise, the number of people who buy books (or online courses) and actually read (or use them), is very small. Why? Because mentally people think, “I bought the book, therefore I’m making progress.” Again, the problem is that buying a book or a course doesn’t change anything. Only reading and implementing the ideas in that book (or online course) makes a difference.
The same thing happens with planning. Just having a big picture strategic plan (or annual growth plan) isn’t enough. It makes us feel better. But until that plan is actually translated into actionable tactical plans, nothing much will change.
So, if you want to avoid planning problem number two, make sure you take your big picture plan, and break it down into actionable steps that are assigned to someone and that have a date of completion assigned to them.
3. They’re Too Complicated/Long
The third most common mistake I see in annual plans is that they’re made way too complicated or they’re way too long for anyone to refer back to them on a regular basis (which, by definition, means they’re non-operational)
You know what this is like (and by the way, way too many of my peers like doing this). Having a big ‘ol plan in a big ‘ol binder makes everyone working on the plan feel like they did a great job. “Hey, look at this big ‘ol binder. We did a great job together!” Of course, how many times during the next year does that big ‘ol binder come out? Exactly. Once. When it’s time to create next year’s plan. Ugh!
A better option is to separate out the strategic and the tactical plans. Keep the strategic plan on one to two pages. Have each person responsible for an area/division/department create the tactical plans for their area—which they keep on hand for themselves. And then have each of those department heads, create a summary sheet of their top tactical ideas, quarter by quarter, on a one page summary sheet, which they turn into the top team.
Again, keep this simple. Quarter 1. Top tactics. Who’s responsible. When will it be completed? Quarter 2. Quarter 3. Quarter 4. Done. That’s all that needs to be on each department’s summary page.
Now, if you’re doing the math. That means that your top team (let’s say you have six key staff) should each have a page (that’s six pages). Add that to the one page strategic summary and you have a seven page top team plan for the year (of which, page one is the most referenced page during the year).
Now, if you followed each of these three recommendation, would your annual plan be strategic? Yes. Actionable? Yes. And Operational? Absolutely!
So, what are you waiting for? You only have 24 days left in the year. Now, make it happen!
To your accelerated success!
P.S. If you need help creating your plan, and would like to do it yourself, stay tuned. I’m going to be leading a class on December 18th and 20th that will do exactly that. I’ll walk you through an entire process, step-by-step, so that you’ll actually create your plan during the class. More to come next week.