How Was 2011 For You? How Will 2012 Be?

How was 2011 for you? Was it all you wanted it to be?

How will 2012 be? Will it be better? How do you know?

We at nuOrder meet and talk to a lot of business owners, and the theme at the turn of the year is always the same; what went well during the previous year, and how do we replicate it? What went badly, and how do we avoid it?

Of course the real problem is that there are so many things which impact the fortunes of your business that the impact of one poor action or one poor transaction can wipe out the positive effect of the 15 transactions which went well.

So how do you make sure that your business gets to where you want it to be at the end of the year? By planning properly at the start, of course.

How do I plan?

Many business owners know broadly what they want to achieve from their business for the year but haven’t got  plans in place to make sure they get there. In particular they don’t always understand what activities (type and quantity) they need to undertake in order to achieve the results they desire. Even if they plan the activities they don’t put measures in place to know when or if they’ve achieved them. That means that they succeed, or fail, by accident. (“Next year Rodney, we’ll be Millionaires!”).

Let’s draw the analogy with going on a car journey from the bottom of the M1 to Birmingham. What’s the first thing you would do? You’d plan the journey, of course. You might even use a satnav to do it for you…..

You’d determine that you should go north up the M1 until you get to Junction 19, where you would turn left onto M6, and then when you get to junction 6 you would turn left onto A38(M) and so on. You make sure you have sufficient fuel, your breakdown cover is up to date and sufficient credit on your card to buy more if you have to.

So you have a plan. Then you put it into action. That involves two things:

  • Knowing when you have achieved an objective in your plan (for instance arrived at M1 J19)
  • Doing the correct next step (Turn left)

So, what happens when you hear on the radio that there is a blockage before J18 on M1? You conclude that getting to J19 is not going to happen and you replan, leaving at J17 and planning an alternative route. Or you ask your satnav to do it for you. Or what happens if you are running out of fuel? Your fuel gauge tells you and you do something about it before you fail in your overall objective.

Running your business is no different. You need to have a plan to get you from where you are to where you want to be:

  • Plan the marketing activities (eg. targeted advertising spend, letters to prospects) you are going to do, and what you’re going to spend on them
  • Determine (measure) whether you actually did them, and what response you achieved. If not sufficient, change the plan to do more, or better.
  • Plan your sales skills and activity to maximise your conversion rate (eg. develop a sales technique which works)
  • Establish (measure) whether the responses you received converted to adequate sales. If not sufficient, change the plan based on your experience.
  • Plan your production capacity to ensure that you have the resources to produce your goods or services (eg. people, raw materials, processes) in sufficient quantity at the right time to service your sales
  • Measure the effectiveness of your production, to ensure delivery was completed in accordance with the plan, and to quality. If not achieved change the plan to resolve the issues.
  • Plan your financial needs to determine your working capital needed, and that your cash flow is as expected (see last month’s article on cash flow planning)
  • Confirm (measure) that items effecting cashflow eg. overhead expenditure, debtor days, creditor days etc are in line with your plan through a cashflow forecast. If not, plan and find ways to bring it in line.

How do you know when you’ve achieved your plan?

You have sold what you wanted to sell, made the profit you wanted to achieve with a bank balance in line with forecast. It’s either that or Birmingham!

What next?

If you’re not sure how to start to plan, or how to make sure that the plan works, then give your local nuOrder advisor a call. You’ll be able to take advantage of our no-obligation free Business Health Check, which will identify what you need to plan for, how best to put the plan together, and what activities you need to make sure that you’ve got there. Think of us as the satnav for your business.

Just remember, if you fail to plan, you are planning to fail.

Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.