If you’re a business owner reading this, I have a couple of questions for you to start:
- Do you have a long term business plan? (3 years, It doesn’t have to be a 100-page document, it can be a 1-pager)
- Is it in writing? (If it’s in your head it doesn’t count)
- Does everyone in your company know about this plan?
- Are you leveraging your teams’ strengths to drive this plan and not doing it all yourself?
- Are you constantly measuring your business against this plan?
- Do you update it regularly to reflect your current situation and let it inform you for next steps?
If you answered yes to all 6 questions, congratulations! You’re in the top 30% of all business owners in America! If you answered “No” to some or all of these questions, don’t worry, keep reading. I don’t have to tell you the fail rates for small businesses in America are extremely high (70% in the first 5 years). So what are the 30% of the businesses that succeed doing that sets them apart?
You guessed it… they have a PLAN IN WRITING!
In April of 2023, a study by BusinessDIT.com found that 98 percent of small business owners think having a business plan in writing is very important. However, less than 30 percent actually have one. The research is clear: companies that have a plan in writing grow 30 percent faster and they are two times more likely to succeed.
There are 2 big reasons I believe business owners don’t have a plan in writing:
1. Time: They are so busy working in the business, they don’t have much time to work on it. I think setting aside a weekend to put together a plan is worth the investment after reading the above statistics!
2. They don’t know how: We’re going to help you take care of that!
Business plans don’t have to be complicated, and if you’re a small business, you don’t have to mess with board members or key stakeholders. If you plan to put in the work over the next 5 weeks, you’ll be able to answer “YES” to all 6 questions at the beginning of this blog.
1. Having a picture of your company 3-years from now gives you clear direction and purpose
I’ve never been a big fan of art. I couldn’t draw, paint, or mold anything to save my life. However, sculptures are fascinating to me. Specifically, the process the artist uses to create one. Most sculptors talk about the process the same way…They don’t start chipping away and see what happens. Sculptors see the final product before they even pick up their tools. Once that image is mentally in stone (sorry for the bad pun), they chisel away the material that doesn’t need to be there. This process creates a beautiful work of art.
The same process is necessary for business owners. We need to see the final product, as best we can, to give us a clear direction of where we are going and what it looks like. Having this picture also helps us know what to say “no” to. It’s the material we can knock off because it isn’t in the final picture.
Do the work of crafting the vision for your company
Let me give you an example. I had a 2-hour call with a young man, the owner of a contracting company. He was 6 months into starting his business and was already feeling frustrated, exhausted, and overwhelmed. After letting him verbally vomit for 30 minutes about his issues, I asked him, “What do you want your company to look like in 3 years?” Silence. Finally, he said, “I don’t know.”
I asked him to come to my office the next day. We dreamed together about what his business could be and what he didn’t want it to be. We got as clear as possible towards his desired future state. Even down to the fine details of what his office would look like, how many crews, office help, etc. We also put a time frame to it and it gave him his north star as he makes strategic choices. He left excited, hopeful, and ready to get started. Why? Because he knew specifically what he was trying to build and his company’s vision was coming together! He was heading in the right direction and putting in the work necessary for his future success.
2. Getting your team on board with your strategic plan gives your team alignment and buy-in
Getting clarity on where you want to go is one thing, but getting people to go with you is another. We know that 3 years from now we are going to need high-capacity people to help make it all happen. However, having the senior leadership telling people where they are going doesn’t work. Believe me, I have tried!
Let me show you what I mean…After coaching/teaching high school for 2 years, I took a job as a student pastor leading a ministry for middle school and high school students. I was told to increase the number of students that were coming weekly and build an adult volunteer base. As an energetic and naive 23 yr. old, I came up with a plan that I thought was genius and foolproof. Filled with hope and excitement, I announced it at the next volunteer meeting (I only had 4 adult volunteers at the time). Crickets! What do you guys think?” I asked. “We don’t have time to do all that,” they said. They took the wind right out of my sails! We talked for a while and I realized that I was making plans FOR them, instead of WITH them. I never made that mistake again.
That means getting the entire team on board
Several years later we had grown to 60-70 adult volunteers and had implemented a 1-day yearly leadership retreat. This was made up of all of our volunteers, old ones, new ones, college kids, etc. People from every part of the organizational level was there. It was a time for us to reflect on the past year (good and bad) and talk about the organizational goals for the upcoming year. The next step was breaking up into their business units and flesh out how their department could help fulfill the overall strategy. Before we left every department would get up in front of everyone and talk about their role in the vision.
This accomplished 3 things:
- It was their idea, so they were more bought in.
- Standing up and telling everyone brings accountability to the plan.
- Everyone left that retreat in complete alignment with where we were going and what their role in it was.
3. Raising up leaders to drive the strategic plan increases employee engagement and retention
This is different than just getting your team to buy in. This is the next level; we are inviting them to take OWNERSHIP and DRIVE the plan.
When it comes down to it, human beings don’t like to be told what to do. It’s probably why you started your own business. You said something like, “I want to be my own boss.” Or “I want the freedom to make my own decisions.” Guess what? Your team members probably feel the same way. If we can lean into that instead of feeling threatened by it, we can create a win-win that makes them want to stay and be a part of strategic direction.
Raise up your leaders and you’ll earn their loyalty
The first job I landed at when I got out of ministry was a construction sales position. The general manager there was a guy named John (not his real name). The owner and John were always talking about what the company could be one day. John was in every high-level meeting, the owners always asked what his thoughts were on important decisions, and he let John lead the charge.
One day I was in John’s office, and he got a call. It was a competitor basically begging John to move over and work for him. The competitor asked John to name his price and it would be done. John said, “I’m going to have to decline.” Knowing that was way more money than he was making now, I asked John, “Why didn’t you take the offer? You’re crazy to turn that down!” He told me 2-3 different people call him every month with the same kind of offers. He said, “Why would I leave? I love it here! The owner empowers me to be me, and we are building something special! I want to be here to see it through!”
“Leaders don’t create followers; they create more leaders.”
Ziad K. Abdelnour
4. Regular evaluations help track your success or need for adjustments
The other day I was driving to a restaurant in downtown Ft. Worth to meet my in-laws for a Father’s Day lunch. I did what I always do when I get in the car, I turn on the GPS to see the fastest way there (I hate being inefficient). I was almost to the restaurant, but I was talking to my wife and missed my turn. My GPS started yelling at me to turn around. I would have gone the wrong way for another 30 minutes if it didn’t tell me.
You see where I’m going with this…the regularly scheduled evaluation meetings are the time to see if we missed a turn, if we need to re-route, or stick to the plan. It helps you know if something is a good idea or a bad one. Did you catch what I called the meetings? REGULARLY scheduled evaluation meetings. They have to happen on a regular basis. They can be on a quarterly basis or bi-annually, it doesn’t matter as long as they are happening regularly and they are helping us reach our long-term goals. These meetings are often pushed, overlooked, scheduled over because it’s not seen as business operations. It’s not making you money. The truth is, if you’re not having them it could be costing you money. This is not the meeting were we go over our key performance indicators, this is a 30,000 foot view of the company. It’s a great time to do a SWOT analysis to see what external factors could be presenting a challenge or what new opportunities could give us a competitive advantage.
How to do a SWOT analysis
Picture this. You’re in a boxing ring. Opposite you, your competition. But wait! You aren’t just wildly throwing punches and hoping for the best, right? You’ve studied your opponent, understood your strengths, and know your weak spots. That’s exactly what a SWOT analysis feels like, minus the bruises and sweat.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Think of your business as an aspiring rock band. Your Strengths are your lead singer’s angelic voice and the drummer’s killer beats. These are the things that make your fans go wild, your secret sauce, the reason why you stand out in the crowd. But hey, no one’s perfect. Maybe your bassist can’t keep a tune or your guitarist keeps forgetting the chords – those are your Weaknesses. The areas you need to work on to hit that high note every time.
But, we can’t just look inwards, right? Outside, there’s a whole world playing a different tune. Opportunities are those concerts, gigs, and collaborations that get you the standing ovation. But don’t forget, there are Threats out there, too. A new band with a groovier rhythm or a change in musical taste that prefers classical over rock. That’s life throwing you a curveball!
Doing a SWOT analysis is like conducting a rehearsal before the big concert. It’s understanding where you rock and where you’re a little off-beat, finding the perfect gigs, and knowing who’s trying to steal your spotlight. So next time you’re planning for your business, remember to conduct your SWOT analysis. It’ll help you hit the right notes and avoid the sour ones!
How do you know if you’re on track or not?
You have to have a baseline! My oldest son just started a strength and conditioning program during the summer. His goal is to get stronger and faster, so the program had him test on his first day. They recorded his 10-yard dash, vertical jump, broad jump, how many pull ups he could do, bench press, etc.
They are going to put him through 13 weeks of brutal workouts and then they test him at the end. That is the only way we know if it worked.
If they didn’t, two people would be cheated:
- The company wouldn’t know if the program actually improves his strength and speed
- My son wouldn’t know if he actually got stronger or faster
That is why it is so important to have a CLEAR picture of where you want to be in the future. As I said in the first point, the more detail we can put in this picture the better. The reason is It gives us the baseline to know if we are on track or not. Sometimes people look at similar companies that are already successful and use that. That’s okay for inspiration, but if you continue you will end up being a copy of them. It won’t differentiate you. You need your picture of your company.
There are so many short-term goals to focus on as a business owner when starting your company. Getting a space, the tools needed, a website, marketing, creating a mission statement, vision statements, customers, vehicles, etc. If you’re not intentional about making time for the big picture, you can look up one day and it’s been 5 years. You are still doing everything and you are no closer to the picture you envisioned.
Every business owner dreams of a successful company one day. Maybe it’s a multimillion-dollar company to sell, or to create a multigenerational family-owned business they can give to their kids, or just to have a business of their own to be their own boss and make a good living. Either way, getting to those levels doesn’t happen by accident. It takes a strategic planning process. Having strategic goals, strategic objectives, and an action plan to implement it. It’s easy to get wrapped up in the day-to-day weeds of your company, but without a plan to know where you are going is like taking off in the car with no destination in mind. Most of the business owners I have talked to don’t understand the benefits of strategic planning and that it’s an ongoing process. If you are great a strategic planning, find someone who is and let them be the strategic planner with you. If you don’t know where you are wanting to go you end up 10 years later wondering how you got here!
Over the next 4 weeks I will walk you through the specifics of how to create a strategic plan, help you create a process of strategic planning, and the purpose of strategic planning. We will talk about how to create your organization’s goals and how to create a business environment where business leaders will not only want to stay, but drive the strategic initiatives for you!