February 6, 2019
The Ps of Planning
The letter P seems to be a recurring one in business literature. We hear about the “Four Ps” of marketing, the “Seven Ps” of sales and the “Five Ps” of business. Today I’m going to talk about Ps, six of them, and how they relate to planning, specifically, how proper previous planning prevents poor performance (and while this article may not rise to the level of actual literature, it will at least be alliterative).
Much attention is given to figuring out what differentiates good companies from great ones — or what characteristics combine to provide growth and prosperity for one small business while a similar one languishes or fails. There are, of course, myriad potential explanations for either, but we may never be able to point to a statistically proven “magic pill” for what separates a successful business from the crowd, one aspect you will quite often see correlated with success is planning.
Most businesses begin with some kind of plan. It may not be a full-fledged formal business plan document (though that always helps), but there will at least be a mental blueprint combined with some financial calculations and a few goals (written or otherwise) for the first year or two and an idea of what in the mind of the budding entrepreneur will constitute “up and running.”
The better the plan is at the start, generally the better the results will be in the long term, but no matter how well researched and comprehensive an original business plan is, it’s a lack of continual planning that becomes a problem for many small businesses. They planned for the first year, maybe the second, but after things become sustainable — customers are coming in, the bills are getting paid, you are finally getting a salary — nearly all small businesses stop planning. That is a mistake. The fact is that when goals are set and written, plans put in place to achieve them and accountability methods set up to reinforce those goals, those goals have a massively higher chance of being achieved than any goal missing all those characteristics.
What can you do to get and stay on track? At one point you had goals for your business whether they were articulated or not. You may have even achieved them by now. That’s fantastic and deserves congratulations. But, do you want to stop setting goals? There’s no harm in that. Many business owners choose to scale their businesses according to their lifestyle goals and maintain a work-life balance, and that in and of itself is an admirable goal. Whatever your goals are, though, plan for them and keep setting them.
Major corporations have entire groups of people dedicated to strategic planning, and that ends up being the primary job of those companies’ CEOs. Your organization has to have something to shoot for. You don’t need to (nor should you) spend your entire career working at planning for your business, but you should be updating your plans at least annually. You had a goal for your first year, what about the next one, or the next five? Keep the chains moving. Growth does not always have to be a goal. It could be increasing efficiency or profitability. I could even be a plan to scale back. But no matter what direction you intend to head, you need a road map to get you there.
Planning Propagates Progress
Strategic plans lead to tactical plans. Long-term planning leads to short-term planning and, organically, successful short-term plans come from long-term plans — instead of letting the day run you, run the day according to your plan. You may have a five-year goal of having X number of locations with Y revenue and Z profitability, but you must outline the steps to get there. A short-term plan for a day, week or month with no context lent to it by a long-term strategic plan is exactly like treading water. With context, however, those short-term plans can be powerful steps to your long-term goals and can help you make the most of your time.
Operationally, every business should have at least a quarterly plan for production and service, cash flow, purchasing, capital investments and sales and marketing. Those short-term plans make your life and your business manageable and make them count in the long run by giving them context.
Provide a Paradigm
Any business owner will tell you that being in business for yourself is challenging. What is discussed less is that those challenges go beyond the physical and are often psychological. It can be more difficult to find motivation some days than others, and it is possible to miss the forest for the trees some days and wonder what all your effort has been for. Strategic plans give you milestones and goalposts both to strive toward and with which to measure your achievements. Pick your end zone, plan your plays to move down the field and create yard markers to measure and motivate your progress. No matter what business you’re in, this will require a lot of hard work and effort, but taking a bit of time each quarter and each year to plan your progress can ensure that all that hard work and effort is moving you in the right direction.
About the Author
Josh Fiorini is the former CEO of PTR Industries, Inc. He spent the first decade of his career in finance, holding positions as an equity analyst and portfolio manager before starting his own hedge fund. This experience, along with a deep background in manufacturing, banking and private equity, has made him a sought-after contributor on numerous boards and discussion groups on political and economic issues for media outlets, corporations and community organizations. Fiorini currently invests his time and resources with non-profit initiatives and acts as a contributor and management consultant to various firms in the firearms industry as the founding and Managing Partner in the firm Narrow Gate Management.
You may also be interested in:
Categories: BP Item, Featured, Industry News, Media, Ranges, Retailers, Top Stories