The first stage of any planning exercise is to define where you want to go.
Imagine starting on a journey to visit mum without knowing where she was? Imagine getting on a plane to go on holiday without knowing where the plane was going?
Without knowing where you want to go, you cannot take steps to get you there.
Obviously, it is the same in Business Planning. In order to know what to do to make your business grow and be successful, you need to decide what you want the business to be like when it is successful.
This week, I’m going to show you how to do that in your Business Planning process.
The clearest way to define what your business will be like when it is successful is to create a Vision Statement and define it for measures of success.
To understand what your vision is for your business so that we can understand what you have to do to get there and design the right strategies, we are going to go through a simple and inspiring three-step process:
- First, we are going to remind ourselves of why you started your business;
- Then we are going to picture and describe your business as your ideal business;
- And finally, we are going to define that picture in tangible terms so we know what we have to do.
Re-discover your Purpose
In his book “Start With Why,” Simon Sinek explains that why you do something is more inspirational than how you do something. In creating movements, people like Gandhi, Dr Martin Luther King Jr, and Nelson Mandela invoked a purpose to the movement. Companies like Apple and Harley Davidson built incredibly loyal followings because they started with why they were in business. Describing Apple, Sinek shows the example where you can’t categorise Apple as a computer company because that is not all they do – Apple described itself through its early 2000’s campaign: “Think Different.” Through that campaign, we saw how Apple believed in making beautifully designed, everyday-use products, not computers. That was their purpose.
When we started our businesses, we had a purpose but over time, we may have forgotten it in the day-to-day hustle of making our businesses work.
That purpose was the reason we may have left a safe job, or that made us decide our idea was worth pursuing.
To define where you want to go in your business, start with re-discovering that purpose.
Why did you start your own business in the first place?
Was it because you discovered a new process that you knew would change your industry? Was it because you knew you could do it better than your boss at the time?
Did you start your business because you wanted to be independent? Did you start it to create a future for yourself and your loved ones? Was it to fulfil a dream?
Pinpoint, identify, and write down the reason you decided to go into business.
Incidentally, if your answer was “to make money,” dig a bit deeper. Nobody just wants to make money – they want that money because of what they can buy or do with that money. So if that’s your answer, ask yourself, what does money mean to me?
Perhaps it was to provide an education for your children or to ensure your later years were comfortable. Even if the reason was so that you could show off to people who had looked down on you, admit it because that could be the spark that drives you to succeed.
Once you have defined your purpose in starting the business, you can use this as your objective in describing your vision.
What does your ideal business look like?
Your vision should describe what your ideal, successful business looks like when you have successfully implemented all your plans and attained your purpose.
Probably the best way to do this is to put yourself in a mindset where, everything being possible, you have successfully grown your business to be the business you have always wanted, and achieved your purpose.
Imagine walking into that ideal business and describe what you see.
What does it physically look like?
Who does it serve? What does it do for those customers and how does it do it? Why are those customers coming back day after day?
Imagine what the customers are saying about your business.
Look at the people who work there.
What do they do and how do they do it? What’s the atmosphere like and why has it become that way? What are your employees getting from working there, why are they loyal and dedicated in serving your customers?
What works well in the business? Go into back-of-house and watch as the people behind the store-front work – what makes it so efficient and productive? What systems and procedures have been put into place? How does the work “flow” from back-of-house to the customer?
Looking around this ideal business, what must the financial results be like? What funds the activity and the benefits?
Once you have a clear picture of this vision of the future ideal business, make it yours by writing it down in a paragraph or two.
Describe the feeling rather than the detail, for example, “Our business puts the customer first because of our staff who work and act like one big family. We provide the best mousetrap because we innovate and continuously develop the product and delivery systems, and that is why our customers love us. This way of being the best results in great financial and non-financial rewards for everyone who works there”
There’s no right or wrong way to describe your vision, just describe it in a way that evokes the emotions you felt when you were imagining that day in the future, and make it yours.
Use exciting and inspirational words because your vision should excite and motivate you and your employees every day to “get there” and will be used, later, to test day-to-day decisions and choices that you will make. Test it to see that if you achieve that vision you will also attain your purpose.
You can, if you like, place it on a wall, discuss it at team meetings, and include it on your website and in company brochures. Use it to drive you and to tell your customers what you stand for.
If we don’t constantly remind ourselves what we are working for and what we want to achieve, we can get lost in the day-to-day and become hamsters in a hamster-wheel!
Quantify your vision
This is how we change your vision statement from a woolly “nice” idea into a realistic target of what we want to plan to get to.
In order to be clear, and to make clear for others, what attaining the vision actually means, we need to quantify the vision. This means we need to describe it in measurable terms.
In doing so, we also set milestones because we can measure exactly where we are on the journey.
To quantify your vision, we need to look at it from four perspectives that are critical to your business strategies. They are “perspectives” because you must look into the vision from different viewpoints. They are:
- From the perspective of your customers;
- From the perspective of finances;
- From the perspective of your employees; and
- From the perspective of business systems.
You cannot succeed without customers. Good customers give you stable finances. You cannot have either without good employees and you cannot have good employees without sales and good finances. You cannot create efficiencies and serve customers without good business processes.
The key is to review your vision as if you were a customer, from the point of view of finances, as if you were an employee, and from the point of view of business systems.
To do this, ask these four questions:
- When I have attained my vision, what will my customers think of the the business?
- When I have attained my vision, what will the business finances look like?
- When I have attained my vision, what will my employees think of working there?
- When I have attained my vision, what key business systems must we excel at to get and keep us there?
To describe the vision from each perspective you may ask the following types of questions:
When I have attained my vision, what will my customers think of the business?
- Why do they buy from me in preference to my competitor?
- Why do they keep coming back?
- What is their relationship with us? Why?
When I have attained my vision, what will my business finances look like?
- What’s my profitability and cash flow like? How does it get to look like that?
- What assets do I have in the business? How are they used in the business?
- How do I reward myself and my employees?
When I have attained my vision, what will my employees think of working here?
- How do they train, develop and contribute?
- Why will they continue working here and be loyal?
- What type of people are they?
When I have attained my vision, what key business systems must we excel at to get there and keep us there?
- What are the key business systems needed to achieve this?
- Why and how do we excel at them?
- How are they kept relevant?
The answers to these questions should reveal some “characteristics” that you must develop. These become milestones and measures of success.
For example, the questions about customers might reveal that one of the reasons they keep coming back, one of the key characteristics described in your vision, is the personal service.
This means that one of your measurements of success must be customer satisfaction of personal service. If such satisfaction is 65% of customers you ask now, and you desire it to be 90% when you have attained your vision, then you can measure it from time to time to see how you are doing.
What it also means is that one of your key business systems must be a customer relationship management system where reminders go out to your staff to contact customers, remember personal likes and dislikes and so on. So the development of such a system becomes another measure of achieving your vision.
It also means that you will need to instigate customer service training for your frontline staff – so another strategy is identified.
If you think hard about your answers to those questions, you can see a pattern of things you need to do or to implement, that become measures of success.
A clear and single, unified direction
Understanding where you want to go by writing a purposeful vision statement and then quantifying it means that you have set a clear direction for the growth of your business.
This helps unify all your actions and the desired actions of everyone who works there – they know what the work they do each day is meant to achieve and that means they should know how to pull in the same direction.
Every choice and decision from then on becomes easy to negotiate.
If you are going to hire somebody, ask “Does this person have the skills and behaviours to help me get to the vision? Will they respond to the measures of employee characteristics and working here?”
If you have a choice between two new products to develop, ask: “Which of these will help me to keep our customers happy and get to our vision faster?”
It’s important to know that you must work on all four perspectives of your vision, and therefore all the measurements at the same time and in balance with one another.
If you flog your staff to attain your financial measures, pretty soon you’ll have no staff. If you satisfy your customers at a great cost unsupported by efficient systems, you will not meet those financial goals. It all works together because it comes from your description of your vision.
Next week, I’m going to talk about how to use this description of your vision and turn it into reality.
In the meantime, I have written a guide and checklist to business planning where I detail these four perspectives. You can get it here.
See you next week!