strategic plan Archives - TAB Corporate

Your Strategic Plan Should Begin with a Personal Vision

strategic plan

In a privately-owned business, the strategic plan for a company is not based solely upon the assumption that the company’s goals and vision are to maximize profit. The strategic plan for your company must begin with your personal goals and vision.

The problem of balancing lifestyle versus being the driving force in a growing business is a common dilemma among owners of privately-owned businesses.

Let me tell you a story that illustrates this point. A TAB member had grown her business from nothing to one doing over $3 million a year within three years. She was taking home over $100,000 a year. She hired a consultant to help her company develop a strategic plan for its growth. The plan laid out the steps necessary to grow the company into an operation with $15 million in annual sales in five years. The consultant showed her how the company would then have a value of over $9 million once the five-year objectives are met.

She told her TAB board of the strategic plan and expressed a personal uneasiness with the company goals. She explained that she was very content with the money she was making. She wanted to work fewer hours, not more. She also didn’t want to bring someone else into the company to run it. Nor did she want to do the traveling that would be necessary to reach the five-year goal. The advice of the group was to redo the company strategic plan so that it would, first of all, satisfy her personal vision, goals and plans. The revised strategic plan resulted in goals that maintained rather than increased the annual revenue, reduced some overhead and enabled her to commit less time to the company.

Do not ignore your personal vision when creating your company strategic plan. Too many business people have been caught up in the push to grow their companies, and they wind up miserable.

Many successful business owners that I have met say if they had to do it all again, they would take more time for themselves. I know that it is much easier to say after accomplishing what they have already achieved, but in advising other business people today, I recommend getting to know yourself first. Find out what will make you happy. After that point, you will be able to determine your business vision, strategic plan and goals that will point you and your business in the direction that will make you happy.





 

Strategic Plan Using A 36 Month Planning Horizon

road in mountains

Strategic plan planning horizons. Are yours as short and chopped up as a horizon between downtown buildings, or are they like an open prairie that lets you see for miles and miles?

Imagine this: A business contact of yours calls you and says, “I have a great opportunity that is going to present itself in the second quarter of next year. I need to know, quickly, whether you want to participate in this. It will take about a half-million dollars, but it is a golden opportunity.” As he outlines the opportunity, it does sound good. But you say to him, “My budget isn’t ready for next year.  We’re just in the budget process right now. I don’t know if I’m going to have room in my budget to participate in this venture.”

If your budget is an annual calendar budget that runs through Dec. 31, you have no way of objectively testing the impact—financial or operational—of an opportunity that won’t arise until the second quarter of the next calendar year. Your strategic plan planning horizon is too short.

Start putting together a 36 month rolling horizon for your strategic plan goals. Don’t limit your planning horizon to budgets, but also set a three-year rolling horizon for staff, markets, capital formation—everything that has importance to your strategic plan goals.

At the end of the first three months, the details for the next 12 months are adjusted or revised with a new starting point. You are always maintaining between 12 and 15 months of a detailed plan, and you add an additional 24 months of a non-detailed plan beyond that. If you never have a horizon of less than 36 months overall, you will be able to test the impact of your decisions before you make them.

How do you test the impacts? If you have a financial model of your business, you plug the decisions into the modeling. You project the investment level the decision will require; you project whether you can afford those dollars in your capital structure; you project whether your cash flow is sufficient. Try out the decision in your operation plan to see whether it would take people away from other critical parts of your operation to the detriment of those operations.

Your planning team should create options that supplement the goals set forth in your company’s strategic plan. The team must identify each of its members’ responsibilities. Collectively, these responsibilities should integrate into all the activities needed to achieve your company goals. Once the planning team has reached a consensus on the goals that collectively make up the strategic plan, the team can focus on the specific activities needed for each area of the company to reach those goals.

Your planning team must identify the critical success factors required to reach each goal. Each proposed success factor must be challenged as to why it is critical in attaining its specific goal. There must also be clear time frames for achieving each success factor. Otherwise, there is no way to monitor whether you are making adequate progress toward your company goals.