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Plan Backward to Get Bigger
The key to creating a plan that works is to start at the end. That is, start by figuring out your vision of the business you want to create. Once you know what you want your business to become, it’s possible to reverse-engineer your success by identifying what your success looks like, and creating a plan to reach it. I call this process reverse business planning.
Vision in Focus
The vision is different for every firm. Take the example of a 3-person accounting firm that has no interest in becoming a 1,000-person firm because of the change that would make in the partners’ lifestyle. Their goal might be to staff-up to 10 people, cut back their own hours, and become a $4 million firm with very little bureaucracy.
Very often, the end goal is exit success. For example, an owner might want to get to $10 million in revenue, get a certain number of distributors on board and a certain number of retailers stocking the product, then sell the company for five times its revenue.
To achieve the future you envision, you will have to complete a series of tasks. The process is very similar to achieving other goals, like losing weight. To do that, you must set a long-term goal (lose 20 pounds this year), schedule new activities and behaviors into your daily schedule (go to the gym, eat healthier), set shorter-term goals (lose 1 pound this week), and measure your progress (get on the scale).
Unfortunately, while nearly every person can quickly answer when asked what they think their ideal weight is, many business owners can’t articulate what their ideal business looks like. And if you can’t articulate it, you’ll never build it.
Here are questions to ask yourself as you begin to describe your vision in detail:
What does your ideal business look like?
What are your annual revenues?
What are your annual profits?
What products and/or services do you offer?
How many employees do you have?
How many customers do you have?
How many vacations are you taking each year?
Then, most importantly: What do you need to accomplish this month, this quarter, and this year to put you on the right trajectory to reaching this vision? Finally, set the appropriate goals in your daily and weekly planning to reach your monthly goals.
In making your plan, you will need to reverse each core aspect of your business—products, systems, sales, staffing—making financial projections and figuring out the milestones to be met on the way to your vision.
This year, 9 out of 10 business owners won’t set a specific goal, or the goal will be broad—“I want to increase revenue.” When an entrepreneur thinks that way, he or she spends the days just trying to run the business better, the way it is. Too many owners work hard and try new ideas, but never really focus on whether they’re getting closer to the end game they want.
A reverse business plan that is, by nature, thorough and detailed will keep you heading in the right direction as you build the business of your dreams.
Reverse-planning for the people you’ll need
Here’s an example of how to achieve a staffing vision:
To start, create the organizational chart of what your business might look like in five years. To get ideas about the roles you’ll need to fill, and the qualifications needed to fill them, look at the organizational charts of more-established companies. If they are public companies, you can find and access this information in their annual reports. If not, most companies have a Team page or About Us section that lists the key management structure of the organization.
Next, figure out which of these roles need to be filled this year. Then, map out the game plan for making this hire. Perhaps this month you will document the job description and characteristics of the ideal candidate, and next month you will publicly post the job opening and begin accepting resumes. In the third month, you will conduct interviews. And finally, in month four, you will hire the candidate and begin training him or her. Because you have a five-year vision for your company, you will have hired the kind of person who will help the company be on the trajectory to hitting your goals.
Contrast this planning method with how the average business owner hires new people. The hire is typically made when someone leaves the company or when the amount of work is simply too much for the current team to handle. The business owner tends to quickly rush through the hiring process. The result? The company ends up with an ill-qualified person who doesn’t have the skillset to help the company reach its goals.