If you call my office in mid-January, you’ll most likely get the following message: “The Planning Shop is closed for our annual strategic planning meeting, please leave a message.”
Each year I take the staff out of the office and develop a strategic business plan for the year. I recommend you do the same — developing an annual business plan is a key to long-term business survival and success.
It was at an annual planning session that we first identified a new market — colleges and universities — that enabled us to survive the bankruptcy of our former distributor.
Developing an annual plan gives your staff a road map for the year ahead. The planning process forces you to take time out to set goals, evaluate changing conditions, and set a strategic direction. And it saves you money! You not only choose your priorities but you eliminate (or postpone) activities that aren’t critical to your success.
How can you plan for an entire year, especially a year as uncertain as 2009? Sure, there’ll be unexpected road bumps, but in this economic environment, planning is more important than ever.
Some special concerns that need to make it on your annual business planning agenda are:
• Retaining current customers. Everyone’s cutting back this year, so you’ve got to work hard just to keep the clients or customers you have. Identify ways to stay in even closer touch with your customers.
• Offering lower-priced offerings. Right now, there’s amazing downward pricing pressure. Evaluate whether you can come up with a lower-priced offering to retain or attract customers.
• Responding to changing industry conditions. My industry — publishing — is changing rapidly, and we must change with it. What changes are affecting your industry?
• Evaluating the competitive landscape. Are some of your competitors dropping out? Cutting back? Can you take advantage of their weakened condition?
• Availability of credit. Banks and vendors are going to be far more stingy when extending credit. What can you do to increase your cash reserves and make sure your credit standing is excellent?
As in every year, there are basic steps for an annual business plan process:
• Do your homework. Gather data on your sales, your key customers, your costs, industry trends, what’s going on with your competition. Be prepared.
• Look at the past. Evaluate which business activities worked and which didn’t.
• List your goals. What are the biggest issues facing you that you need to tackle? What do you want to and need to achieve this year, financially, operationally, in terms of products, services, employees?
• Get specific. Make each goal as specific as possible, adding quantitative measures if you can.
• Brainstorm. Spend some time coming up with creative approaches to reaching those specific goals and to stay ahead of changing conditions.
• Identify actions. What steps are necessary to achieve each goal? List the key things you must do to make your goals a reality.
• Estimate costs, time and human resources. How much will each activity cost you? How much time will it take? Who’s responsible? This gives you an overall sense of the total commitment necessary to achieve your goals.
• Prioritize. By now, you’ve got a list that would take much more money, time and people than you have. So, prioritize and rate highly the things you must do to survive.
• List your action plan. Based on your priorities, come up with an action plan. Schedule the month, week or day you’re going to take action on each step and what that action will be. And assign responsibility.
Developing an annual business plan can truly help you survive and succeed.
Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”
