The 2nd of a 4 Part Series on the Key Focus Points in Running a Business
In a recent post, I mentioned the 4 key ingredients in a recipe for small business success- the importance of Cash Flow- “Cash is King” and how my Mom’s approach to cooking became part of me and consequently my approach to business. What I keep in mind is that there is no absolute recipe for anything. Mom would cook meals for us using whatever was locally available, whatever the season. My grandfather was a moose hunter in Northern Quebec. Even today, at 90 years old, when I ask Mom what she would like for dinner- she will say (in her French accent) “moose steak in black butter”, a little salt and pepper and voila! You should try it! – sprinkled with fresh chopped chives, a pat of fresh garlic butter, and a cold glass of Yuengling! Simple, but it works. That is not to say there was not careful thought involved. Hunters strategize and plan when, where, who to hunt with and eventually how to share in the success or possible failure. No moose, no moose steak. This leads me to the 2nd of the 4 key ingredients in a successful business – Strategic Planning:
- Cash Flow
- Strategic Planning
- Information- not data
Many small businesses start with an entrepreneurial spirit, an idea and one or two partners, perhaps an operations person and a sales person. After much hard work the company has grown to the point that they find themselves mired in the day to day activities necessary to keep the business going but have lost focus on the short and long-term goals of the company. Consequently, growth opportunities pass by unchallenged.
It has been said that there may be nothing more important in business than good strategic planning. Conversely, there may be nothing more wasteful than bad strategic planning. Strategic planning should not be difficult and time consuming. Business owners need to take the time to:
- Evaluate the current situation. This helps to understand their own and the competition’s strengths, weaknesses and relative positions in the market.
- Define goals and objectives.
- Map a plan to reach those goals with timelines and individual or team responsibilities.
It is common in small business for people to wear many hats and consequently time is usually spent focusing on areas that provide clear and immediate results. In itself, the planning process should improve communication within the company and allow better understanding of itself and its market. It also fosters teamwork and a unified company culture. A successful strategic planning process will provide the clarity and focus that is often forgotten in small companies – especially those with limited employee resources. Goals should be communicated to all employees to the extent possible. They should be a daily focus and periodically reviewed and revised as business conditions change.
Please stay tuned for my future posts re: “Information- not data” and “Accountability”.
Dan Makuch, CA