Smallbizlady: Everything changes so fast today, why is planning so critical to business success?
Laura Posey: Imagine that you were going to build your dream house. Would you just go to Home Depot with a few thousand dollars and start buying supplies? Of course not! Instead, you’d decide what kind of house you wanted to live in, draw out how it would look and then create a detailed blueprint for building it. Then you could build the parts you wanted to and hire others to do the work you didn’t want to do or couldn’t do yourself.
A strategic plan is like a blueprint for building your dream business. It eliminates the time and money that is wasted on the wrong decisions. It focuses everyone in the company on the right goals and the right way to get them done.
Smallbizlady: Don’t most strategic plans just end up on a shelf gathering dust?
Laura Posey: Yes, most strategic plans are a half-mile thick, take days to create and, after all that work, end up in a three-ring binder on a shelf. The act of thinking through everything in a plan like that is helpful but the end result isn’t as useful as it could be.
That’s why I created a program called The Simple Strategic Plan. It condenses your strategic plan to one sheet of paper and it only takes about an hour to write your first one. After that it only takes about 20 minutes per year to update. This way you have a plan that you can use on a daily basis to build your business.
Smallbizlady: Why did you create The Simple Strategic Plan?
Laura Posey: About six years ago, I hit a wall in my business. I’d been building a business with a partner for five years and, although we were making money, I hated the business. I was working too hard for too little and I wasn’t able to indulge in my passion, travel.
I went out to the desert around Sedona, Arizona and had a long talk with myself. I spent a week getting clear about what I wanted. Each night I got online and read about planning and different planning tools. At the end of the week, I’d created my first Simple Strategic Plan.
I’ve been using a version of that first plan for the last five years and in that time my income has gone up 5x and my work hours have been cut in half. I’ve traveled to 13 countries.
Smallbizlady: Why do small businesses need a strategic plan?
Laura Posey: If you own a business, you need to have a strategic plan. It will guide you and focus your energies and efforts like nothing else.
Strategic plans are also great for salespeople and others who work for someone else but who want more than they have now. Having a strategic plan for your career will help you end up at the top of the ladder (or owning your own business).
Non-profits also need strategic plans. You’ll find it much easier to raise funds when your donors can see exactly where you are going and how you plan to get there. Your supporters will also find it easier to spread the word about your cause.
I even have families who use The Simple Strategic Plan. They create a plan for how their family will interact, spend family money and time and all grow together.
Smallbizlady: What are the absolute must-have parts of a strategic plan?
Laura Posey: The two biggest keys are writing down your foundation beliefs and values and having a good vision. If you don’t have those two key pieces, everything else is meaningless. Sadly, most people forget about these key elements, values and vision and, as a result, they aren’t as effective as they can be.
Smallbizlady: Why do you start with the values and beliefs?
Laura Posey: The values and beliefs of a company become its culture. That is, they determine how people within the company will interact with each other, with customers, with suppliers and with the community. In a well-defined culture, everyone knows what to expect from everyone else and it makes communication and implementation of plans so much easier.
You might have heard the term “getting everyone rowing in the same direction”. A good culture makes that happen and it ensures that there are few personality conflicts within a company. It makes hiring so much easier and it even helps you attract better customers. Those who believe the same things as you do will flock to you.
Take a look at Apple. They have strong culture and it shows up in their products and their advertisements. A lot of customers are strongly attracted to Apple because of their well-defined culture.
Smallbizlady: Why is the vision so important to a strategic plan?
Laura Posey: Without a vision, that is, a long-term result you want to achieve, a company will flounder and waste time and money in the wrong places. Imagine all those employees rowing together but none of them knowing the destination. The boat would be going quickly but it might just be headed for a waterfall!
With a clear vision, everyone in the company knows what the ultimate goals are. When you combine that focused direction with clear values, everyone in the company can make the right decision in any situation. Anytime a decision comes up they can simple ask themselves, “Is this in alignment with our values and will it move us closer to our vision?” If the answers are both “yes”, then do it.
Smallbizlady: What else should be in a strategic plan?
Laura Posey: I like to think of it as reverse engineering a vision. That is, taking the vision and backing into how I’m going to achieve it.
I break the vision into five-year goals and look at the areas of the business that will need to be changed in order to achieve those goals. Then I look at my next one year goals and what areas of the business need to be changed in order to hit those goals.
You also need some key metrics that you will measure on a weekly basis to keep you on track.
Additionally, I find it helpful to have an annual theme that summarizes or creates an image that will keep you focused and excited about your year.
Smallbizlady: How do I implement a strategic plan?
Laura Posey: Implementation is easy when you have a clear vision and good one-year goals. Break the one-year goals into quarterly initiatives and then break those into weekly tasks. The weekly tasks get broken into little bits that are no longer than ½ hour to-dos.
Think of your vision as trying to move a huge boulder. If you break the boulder into hunks of rock and then break those into bits of sand, the boulder is easy to move, handful by handful. Your job then becomes to move as much sand as you can each day until the whole pile is where you want it. Simple, huh?
Smallbizlady: Can you share examples of how a strategic plan has changed someone’s business for the better?
Laura Posey: Absolutely. I have a client in Buffalo that has been in business for 10 years. He struggled for the first ten years and had managed to grow no more than 10% in any year. He was in deep debt and working 60+hrs/ week to get things done. He did his strategic plan and in the next year he grew 65%, paid off his debt and took a two-week cruise with his wife. He has tripled his business in just three years.
Another client in Richmond grew her company 48% in the first year of doing her plan and managed to take time off for four trips and plan a major charity event.
Both of them attribute their success to doing the right things at the right time and having a plan to get it done.
Smallbizlady: How does a strategic plan fit in with other plans like marketing or sales?
Laura Posey: A good strategic plan is the foundation for other plans. It makes sure that all of your marketing, sales, etc. are aligned with the ultimate goals and vision of the company so you don’t waste time with the wrong message, prospects or activities.
Your other plans will be an extension of the strategic plan. If we are using a building a house analogy, where the strategic plan is a blueprint for the house, I like to think of the other plans as the landscape plan, the wiring plan, the plumbing plan, etc. They all come together to make the dream house perfect.
Smallbizlady: What are the biggest problems you see people making with strategic planning?
Laura Posey: There are two problems.
First, not doing a plan at all. Winging it almost always ends in failure. Spend a little time planning and you’ll save thousand of dollars and hundreds of hours down the road. “A stitch in time does save nine!”
Not using the plan they created. Yes, the process of planning is helpful but using it where the real value is. Having that blueprint that you can execute a little each day will give you a feeling of success and forward progress. That feeling will propel you to even more achievement.
If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter. Here’s how to participate in #SmallBizChat: http://bit.ly/S797e
@SmallBizLady’s new ebook is LIVE!
Order now: http://bit.ly/sm-ninja
For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.