Your business needs a one-page strategic plan to help you navigate challenges with clarity and focus. In this post, I’ll walk you through exactly why this is so important and the benefits of investing your time in writing one.
In my post about how to improve your cash flow, I said that a strategic plan could make magic happen in your business. So what makes your strategic plan so magical? If done correctly, your one-page strategic plan will:
When was the last time you sat down to think about what you truly want out of your life and your business? If you haven’t done this recently, how do you know if your decisions ultimately guide you towards your ideal lifestyle?
In the widely popular The 7 Habits of Highly Effective People by Dr. Stephen Covey, habit 2 is “begin with the end in mind.” In the book, he explains that everything is created twice. “There’s a mental or first creation and a physical or second creation.” To have a successful business, you must have clear ideas for your products, services, and strategies before you begin to take action. Likewise, to have a successful life, you need to have a clear idea of what that means to you.
Dr. Covey also proposes that “all things are created twice, but not all first creations are by conscious design. In our personal lives, if we do not develop our own self-awareness and do not become responsible for first creations, we empower other people and circumstances outside our Circle of Influence to shape much of our lives by default.”
This means that unless you take the time to figure out what you want, influences from others will do it for you and may not lead you down a path that will make you truly happy.
Do you have a mission statement? If not, now is the time to start working on one. A good mission statement and clearly defined values are guiding lights that help you navigate challenges.
Continuing with my thoughts on The 7 Habits of Highly Effective People, Dr. Covey states that “The most effective way I know to begin with the end in mind is to develop a personal mission statement or philosophy or creed.” Creating a solid mission statement for your business will allow everyone on your team to make difficult and important decisions that guide the company towards your end goal.
If the end you have in mind is a long way from where you are now, getting there might feel impossible. This is where good goal setting comes into play. Goal setting will help you break down your main goal into manageable milestones and give you two primary benefits.
First, your goals will help you create a clear picture of how you will reach your end goal. Think of them as a roadmap. For example, if you want to drive from New York to Los Angeles, you’ll need to know what cities you’ll drive through in between. There are many ways to get there, but you decide to go the most direct route that takes you through Chicago, Denver, and Las Vegas. Now that you have some intermediate goals between New York and Los Angeles, you need to figure out the details between New York and Chicago, your first intermediate goal. Next, you will create plans for when you want to leave, how often you think you’ll need to stop, etc.
Similarly, if your goal is to buy a large property for your business and you can barely afford rent right now, it might feel impossible to make your dream happen. Your goal-setting process breaks down your big goal of buying property into smaller goals to help you along your way.
Second, your goals will help you focus. As a small business owner, there’s a never-ending supply of things to distract you. Making clearly defined goals enables you to focus on what matters most at the moment. If you’re driving from New York to Los Angeles and currently going to Chicago, it’s more important to focus on where you’re filling up with gas next than where you’re going to eat in Las Vegas. If you want to buy a property, focus on how you’re going to increase cash flow, not what kind of fence you like best after you buy it. It seems evident from the outside, but it’s incredibly easy to lose sight of what matters most inside a business.
Your goals will also help save you from unnecessary or unrelated distractions. For example, if you’ve already decided on the Chicago, Denver, Las Vegas route for your drive, it doesn’t matter what the best restaurant in Albuquerque is; you aren’t going there. Likewise, if your goal is to buy land in Washington State, the great property in Texas isn’t worth your time because you don’t want to be in Texas.
Goal setting has helped me improve my business dramatically. I have lots of ideas, and I love to research new things. These are great qualities because they help me continue to grow. However, I find it too easy to get distracted by exploring new software or spending too much time working in my business instead of on it. Setting goals helps me stay focused on what matters most to achieve my dreams.
Once you have a goal identified, how will you know that you’ve been successful? Your strategic plan will establish your Key Performance Indicators (KPIs) that will help you measure the success of your actions.
Ideally, your KPIs will be something you can monitor regularly. Sticking to the navigation theme, think of your KPIs as a compass. If your compass is generally headed north on your drive, you’re probably going to end up in Seattle instead of Los Angeles. Even though Seattle is a pretty cool place, it’s not where you wanted to go. If you wait until you see the ocean to figure out where you are, it’s too late to do anything about it without some extra driving. If, however, you monitor your compass after you leave Denver and realize that you’ve been driving north for 50 miles, you can correct your course more timely.
If you want to buy property, you’ll need to keep track of your cash balances, but just as important will probably be factors like your days sales outstanding (DSO) and profit margins. If your DSO is consistently going up, your property buying chances are probably going down. On the other hand, if all you’re doing is checking your cash balances, it’s going to take much longer to figure out what’s going on and take effective action.
Have you ever set a goal and then thought, “now what?” I know I have. Alternatively, have you ever found yourself diving in and doing things without a clear idea of what you’re supposed to be doing? Yep, I’ve been there too. One of the important things your one-page strategic plan will do is help you take decisive action.
Defining your strategy will lay out what you’re going to do to achieve your goals. So, suppose your goal is to improve your cash flow to buy property. In that case, your strategies might be decreasing DSO by 15 days by offering early payment discounts and negotiating with key vendors for more favorable payment terms. So now, instead of trying to employ ten different ways to improve your cash flow, you are taking action on the two that will help your business the most.
You are not in this alone, even if it feels that way. As small business owners, we tend to shoulder too much burden alone. Your strategic plan will identify the people you have on your team who can help. If you need to add resources to your team, your strategic plan will help identify those. It doesn’t matter how lofty your goals are; knowing that you have people to help along the way makes a huge difference.
Thus far, what I’ve written isn’t groundbreaking. In fact, you’ve probably read the same information and ideas elsewhere. You might be thinking to yourself, “I already have all this in my head. So why would I need to write it down?”
There are three reasons why writing your strategic plan is worth your time.
When you take the time to write down your strategic plan, it allows you to see inconsistencies or areas that need more development. Anyone who has ever had to document a new process for a standard operating procedure can tell you that we believe our ideas are clear and well thought out. But, when we start writing, we find holes in our thinking. So, going through the process of fully developing your plan will give you clarity now and help you down the road as well.
Staying accountable can be a challenge for entrepreneurs. We have so many great ideas that picking a direction and sticking to it can be challenging. When you have a brilliant new idea, compare it to your written strategic plan. If it fits into the plan, Great! You can start working on implementation. If it doesn’t, you have to decide, does this go onto the long-term project list, or is it so extraordinary that it’s worth redoing my strategic plan to incorporate. It’s much easier to objectively evaluate if your new idea fits your existing plan if the plan is in writing. This process requires discipline but helps to keep you focused on your goals.
Once you have a written plan, share it with your whole team – employees, marketing team, CPA, and anyone else part of your business. Even your customers should know your plan’s vision and mission portions. Only when your whole team understands the plan can everyone work together to achieve your goals.
Strategic plans have the power to transform your business. This is why I work directly with clients to develop strategic plans. When I fully understand your vision, mission, and goals, I can tailor my work to fit your plan and help you achieve your goals. I genuinely believe that a well-written one-page strategic plan is worth the work it takes to write. I know this because it has helped me transform my life and my business, and I can see it transforming my clients’ businesses.
If you’re ready to write your strategic plan, watch this space for my next post on How to Write a One-Page Strategic Plan. If you’re interested in working with me to create a plan to scale your business and work towards your end goals, schedule a free introductory call today.
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