By combining bravery and ambition with a measurable and strategic approach to business planning you can make this year your most successful to date. Elixir Consulting managing director Sue Viskovic explains all.
When writing your business plan there are three vitally important ingredients that will help ensure that your plan is effective.
If you’re not clear on the overall vision of your business, you’ll be hard-placed to create a business plan that delivers results that exceed what you’ve achieved previously.
Remind yourself why you started the business, what it stands for and why you’ve taken the risk to create it in the first place rather than simply go out and get a job…share that with your team and complete the next two steps with this vision and purpose firmly in mind.
Now get specific – what is it exactly that you want your business to achieve in this period? We recommend thinking both in quantitative and qualitative terms.
Quantitative ‘whats’ will typically be the financial measures you’re looking for – your annual turnover, your net profit figure, the average income per client (and therefore number of clients), etc.
Qualitative ‘whats’ will be more about the quality of your business experience – perhaps you want to move offices, or you’d like your team to implement a community service of some sort – or the principals want to cut back and enjoy more time away from the office.
In order to generate true power, your ‘whats’ have to be measurable and definable. ‘Increase our recurring income’ will not work nearly as well as ‘lift our recurring income to 45% of total revenue’.
Your qualitative ‘whats’ by definition may be harder to quantify, but you still want to be specific. For example, 'principal(s) to play golf once a week’.
Be brave when setting your ‘whats’! Don’t limit yourself – cast off the shackles of self-doubt and go for it! At this point, don’t allow external forces to limit your expectations of what you can achieve. We have worked with many businesses that surpassed their previous highest annual growth figures during the global financial crisis.
You’ll get some reality when you look at your ‘how’, but at least start by aiming high. The worst that can happen is that you fall short of achieving the targets you’ve set – but you will likely find that by aiming high, you’ll still achieve more than what you would have had you set a modest target.
Get specific about the activities required to achieve the targets you’re aiming for. It is at this point that you can have the greatest impact on achieving extraordinary things.
First, determine your new client revenue target, work out the average amount you charge each new client, then determine the number of clients you need to achieve that figure. Divide this by the number of months that you actively see clients (allowing for holidays, and lead time from enquiry to implementation) and you have your monthly target. Then consider your conversion rate to determine the number of new enquiries you need to generate, and determine your enquiry target. Then consider the marketing activities you can implement that will generate those enquiries.
Example of calculating ‘hows’
New client target: $300,000
Average new client fee: $4,000
Number of new clients required ($300,000/$4,000): 75
Number of months: 11 (wind down up to, and just after, Christmas)
Monthly new client target (75/11): 7
Conversion rate of new clients from initial enquiries: 70%
Monthly new enquiry target: 10
We’ve shown an example here of a business that’s decided they want to grow their new client revenue to $300,000 per annum (and that’s a jump from what they’ve previously achieved). So in our example, to obtain seven clients per month you may need to field 10 enquiries. You may know that each new client will require four meetings before their plan is implemented, and the typical turnaround time from first meeting to implementation is, say, three months.
Now you have some real information you can work with. Your ‘hows’ on your business plan will now be specific – obtain 10 enquiries per month; conduct seven first meetings with new clients per month.
What is really important is to then determine what you will do to attract those 10 enquiries per month, and note these activities as specifics on your business plan. If you’re working to a one-page business plan you may need to simply state ‘implement marketing plan’, and dig into the detail in a separate document that is your marketing plan.
You might find that, when you break it down, the activities aren’t all that onerous at all and you have the capacity in your current team to handle the additional workload with ease.
If you start at the right place, your ‘why’, and clearly define what you want to achieve and how you will get there, your business plan will hold meaning for you – and will be an effective blueprint to deliver the results you’re seeking in your business.