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1
What is the difference between Strategic Planning and Business Planning?
2
3 Ways to Increase Your Sales
3
What would I do to your business if I took over?
4
Cultivate surprise in your business!
5
Metrics for better business

What is the difference between Strategic Planning and Business Planning?

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I get a lot of calls and email from people asking me questions about strategic planning. After the first few minutes of conversation or reading the email it becomes clear that many people are talking about a business plan when they refer to a strategic plan. So, I thought I would discuss the difference between the two.

Planning is planning, but a strategic plan has a quite different purpose to a business plan.
Usually a strategic plan is an internal document that provides an overall direction for a business that looks out over a longer timeframe than a business plan. I explain it by calling it a “helicopter view”, that is, you provide a view of the topography your business operates in, you identify your current position and you identify where you want to go, and you provide a broad “strategic” direction of your desired path to get there. There are very few details for a number of reasons.
Firstly because of the longer timeframe many details that you require to make detailed plans are unavailable. Then the purpose of a strategic plan, to set strategy, does not require detail but rather needs to identify key strategic issues that the company will face over 5 to 10 to 20 years, and the strategies it will use to get there. In my helicopter analogy, you know you want to go east – you do not at this stage need to know which of 5 available roads you will take.
A business plan on the other hand should be prepared to cover a shorter timeframe, from 1 to 5 years. Since it is expected to contain some more detail about the actual steps you will need to take to implement your strategy, the inputs that will affect your decisions need to be more predictable, hence the shorter timeframe. Logically then, you may formulate a 10 year strategic plan, then follow up with two sequential 5 year business plans.

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3 Ways to Increase Your Sales

teik-oh-standing-wall-left-mediuTell me if this sounds familiar:-

For some reason, perhaps you want to increase profits or you just want to grow your business, you sat down and decided you needed to increase your sales by setting a new sales target. Having worked out what sales you need to increase your profits or grow your business, you look at your new sales target – at how much you need to increase your current sales by – and you went “Oh crap!”

The increase in sales is scary! Oh my goodness, increasing my sales by 30% sound alright but that’s an extra $600,000! How the heck am I going to do that???

This video tells you exactly how to do it in three different ways that leverage up to a substantial increase in sales.

Remember all sales are made up of three components:-

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What would I do to your business if I took over?

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In response to an article I published earlier, I received an interesting query. Jim, who is the owner-manager of a wholefoods distribution business based in Denver, Colorado, and who employs 20 people across two states, asks what changes I might make to his business if I took it over, sight unseen.

Before I thought “sight unseen” was a bit unfair, Jim explained that he felt his business performance was starting to plateau and wondered if there were any common changes he could put into place in order to shake it up.
This question raised issues about business growth as well as about efficiency, so it made me think of the key aspects of a business that any business should think about changing today. So, sight unseen, here is what I might do.
First, I would spend some time every day seeing customers, suppliers, staff and other key stakeholders, either one on one or in groups, or at least talk to them on the telephone. I believe business today needs to maintain good relationships with key stakeholders, especially customers, staff and suppliers. If you do business with friends, it is hard for friends to stop doing business with you. As well, you can get great feedback to your face – that’s always a catalyst for change especially if the feedback is (constructive) criticism! The topics for discussion would be how we are doing business together, could I help them more, and how we might be supportive of each other if times got bad. Added to that would be more personal topics if you feel this is appropriate, such as how their businesses were syncing with their personal goals. This type of personal information can help you both in designing different business models.

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Cultivate surprise in your business!

In business it is critical that you formulate and write down your plans. The old adage “businesses do not plan to fail, they fail to plan” is so true! Throughout the world the statistics is quite consistent – between 70% and 80% of startup businesses fail within the first three years, and when asked, most of these business owners say that they operated without a plan.

SONY DSCAnd yet, in my three decades of helping clients start and grow businesses, I can tell you, hand on heart, that your business plan is out of date as soon as it is written!

What? So why the heck am I spending this much time (and probably money) planning and documenting my plan?

Because you need to have an idea of what you are up against, what opportunities you can take advantage of, and how you will go about it. With a plan, as some of your assumptions change or circumstances change them, you will know the strategic direction you are heading, the steps you intended to take and how you can adjust them to suit the changed circumstances. Without a plan all you can do is react, follow events, rather than create them.

So how do you deal with changing circumstances? In this video I talk about expecting surprises to pop up. Cultivate the ability to look for surprises and the flexibility to take them on board as opportunities! Read More

Metrics for better business

Businessman Holding Graph

In an earlier article, I wrote about how the measurement of your business success should include qualitative measures as well as quantitative benchmarks.

I received a lot of email to ask about what quantitative metrics I thought were important in business. Now, I repeat what I said earlier, first, that qualitative metrics such as customer satisfaction and service delivery times can be just as important as quantitative measures. Secondly, that you need to define what you mean by success before you can choose the appropriate measures.
Having said that however, I thought I should deal with all those emails and provide a discussion on the types of quantitative measurements you might want to employ.
Howard from Sydney asked what might be some warning signs to watch out for.
Here are some quantitative metrics from your profit and loss account that can show your business is needing attention:-

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