A business plan is a written description of your business’s future, a document that tells what you plan to do and how you plan to do it. Business plans are inherently strategic. You start here, today, with certain resources and abilities. And you want to get to there, a point in the future (usually three to five years out), at which time your business will have a different set of resources and abilities as well as greater profitability and increased assets. Your plan shows how you will get from here to there.
Consider these questions in developing a multi-dimensional business plan and goal curated from the Liberated CEO by Scott A. Leonard.
What is the real deliverable of your business?
The late, great Peter Drucker famously observed that customers rarely buy what the company thinks they are selling to that customer. Why? Because “nobody pays for a ‘product.’ What is paid for is satisfaction.” Or, as marketing guru Ted Levitt famously said to his Harvard Business School students a generation ago, “People don’t want quarter-inch drills—they want quarter-inch holes.”
All of us fall into the trap of thinking we are selling a service such as estate planning or real estate management or investment management, but in reality, customers hire those products and services to achieve a goal. In my business, I realized after talking to many clients that our true deliverable is peace of mind. By answering this question, you’ll gain focus on what is essential to your customer service. To gain insight into this question, pick out your five best clients and take them each out to lunch. Allow plenty of time. Ask them how your firm benefits them, and how your firm could improve in achieving that goal. Listen.
What time investments will your family relationships and friendships require?
Can you envision developments in this area such as seeing an aging parent one weekend a month, coaching a youth sport, starting a project with your children, or spending more time with your spouse on weekends?
What family transitions can you anticipate and plan for?
You’ve likely thought these through from a financial perspective. Have you considered what major transitions require in terms of your time? These events could be your spouse or close friend retiring or transitioning out from his or her career, an adult child’s wedding or move, an aging parent’s transition to an assisted living facility, a philanthropic or community service commitment, a special-needs child progressing to high school or college, and so forth. Just as we plan and project for market changes in business, we should do so for our personal lives.
What is the appropriate size of your contingency fund and how long do you need to build it?
Whatever your liberation goal may be—from retirement, to introducing an innovative service, to spending more time outside of the firm—you want to carefully estimate what additional funds should be set aside as vision insurance to ensure that setbacks or unexpected new events don’t hurt you or your firm financially.
What is your end game?
Very few of us can plan for our business, finance, and professional goals on the basis of business metrics only. You need to incorporate social, community, and family concerns, and your own purpose in becoming an entrepreneur when determining what your exit strategy is for your business.
By writing down answers for each of these questions you will be able to strengthen your goal, understand how it fits with your business, and plan for how long you need to reach it.
For more on successfully running your enterprise, The Toyota Way: 14 Management Principles by Jeffrey K. Liker.