The Strategic Plan.
Strategic goals are the fundamental, identifiable, reasons for the business existing.
The difficulty for many people is in clarifying the key or vital goals without allowing vague notions such as:
- “I want to make a lot of money“, or
- “I want to leave the business for future generations”, or
- ”I want to run my own bakery” to replace clarity.
I would urge you to simplify the process to having no more than three very clear goals for your business. Successful owners that I know re-consider these goals annually and revise them as life, the economy and their industries change with time.
Let us take the three examples above.
- “I want to make a lot of money“,
This is too vague to inform your daily decisions on investment. Far more helpful would be a goal such as;
- “I want a return on my investment in the business 5% greater than if I invested in Australian bank XYZ over the next 12 months”.
This more narrow and specific goal can be measured, judgements about investments in plant or stock or staff can be made against this specific goal. If the proposed new member of staff cannot be forecast to generate profitable income to meet this goal then don’t take the burden on. Judge your decisions about investments in new tools or a prominent office location etc. against the goal. Decision making becomes much more simple, more streamlined and more appropriate when measured against your primary reasons for being in the business.
- “I want to leave the business for future generations”,
The presumption in this goal is again far too vague to be helpful. I would urge that any business owner discusses succession with their children or other staff to be quite clear if that is the shared goal. A great number of staff do not want to have the responsibility of owning a business. Be very clear to establish who you intend leaving the business to. If there is no clear candidate for succession then perhaps you should consider preparing the business for eventual sale. Just putting it up for sale eventually is also far too vague a notion to become a goal. When establishing your goals consider something along the lines of;
- “I want to sell my business to another company in the industry in 10 years, or by the time I am 55 etc.”
Such a clear focus will allow the business to position it’s investments and growth to meet these over-arching goals. The aim of any Strategic Goal, should be to simplify all day to day decision making. It allows the business owners and managers to prioritise spending and effort to a focused goal. It removes confusion and ambiguity. It speeds up the daily decision making processes.
- ”I want to run my own bakery, repair workshop, graphic design house etc.”
These sorts of goals are often heard and stem most often from a discontent with working for ‘others’ rather than a specific desire to run a business. If you enjoy your trade more than the activity of running a business then one of the key goals that may be more appropriate would be;
- “I want to grow the business over the next two years to a scale that will allow me to employ a general manager who can carry out all the administration functions of this business and free me up to return to the pasty bench, the lathe, the drawing board etc.”
These Strategic goals should be made familiar to all the staff within the business so that everyone, and every decision is heading in the direction the business owner has chosen. After all it is your business, run it don’t let the business run you or it will end in tears and failure.
In the next blog I will propose a Business Plan structure that I have found simple to implement and clear to use. It has proven it’s worth in over 50 businesses that I have worked with these past 40 years.
Thank you for reading this blog and please feel free to add any comments to the discussion.