Creating A Good Business Plan – 5 Annual Priority Pitfalls
As a Business Coach I very often assist in creating a good business plan. Are you finding it challenging to create a good business plan? How often is there a difference between the plan your create and the actions your teams initiates? How big is the gap between expected and actual performance? In my experience, poor business planning may be costing you serious growth in revenue and profits.
One goal of creating a good business plan is to determine what your priorities should be. These are the 3 to 5 annual initiatives that should move your business forward. Many business leaders ignore their weakness in this area because they find that they can fail to achieve their stated initiatives yet still achieve their immediate financial goals. Priorities are usually strategic in nature or are items that do not show directly in the P & L, such as initiatives that strengthen customer loyalty. Their effects are usually 9 to 12 months out. The natural tendency is to worry about today, which is why most business plans never get executed.
While creating a good business plan and setting your annual priorities, beware of the following common pitfalls:
- Poor Clarity – An initiative should be described with such clarity that a stranger would know what you are trying to accomplish and be able to hold you accountable. Every initiative has to meet the SMART (Specific Measurable Attainable Related Time-Based) criteria. Here is a good example of an unclear initiative I recently saw on a one-page plan entitled “Flawless Execution.”
- Short-Term Focus – Some plans focus on initiatives that affect only the most immediate quarterly goals. Don’t get me wrong…every business needs to make money and cover its expenses. The problem occurs when you are so focused on the short-term that you are not able to spend time making the changes that are necessary for making quantum leaps.
- Ignore the Trends – I see companies that continue to ignore the fact that the traditional ways in which their customers purchase their products and services have changed. Blockbuster was a great example of a company failing to recognize the trends.
- Accepting Your Weaknesses – Knowing that you have weaknesses is not the same as doing something about them. Every company should make it a priority to seriously address, if not eliminate, at least one weakness every year.
- Over Ambition – Too often leaders see all the things they are unhappy with and try to make too many initiatives into priorities. Generally it is good practice to have 5 or fewer annual priorities. I prefer 3.
The One Page Strategic Plan created by Verne Harnish has all the key components of a business plan and the Four Decisions Process can help simplify this whole process for you. We can maximize your team’s success by contacting us for a free consultation to learn how a Business Coach can help your organization or check out the testimonials page for stories from other leaders we have coached.