We talk about planning a lot at We Are Tabono, whether that be planning your work-life balance, your content, or indeed your business as a whole. Why? Because having a plan makes you feel more organised. It can help to make sure you’re heading in the right direction and keep you on track. But equally, there is the potential to be too well planned. That can lead to panic when things happen that are unexpected or unwelcome. We can become over-reliant on our plans, leading us to miss opportunities. So when it comes to planning ahead in business, how far into the future should we go?
How do you actually feel about planning ahead?
At this point, I could bombard you with statistics to demonstrate how important it is to plan ahead in business – for example, this piece in Harvard Business Review explains that new start-ups are 16% more likely to achieve viability if they have a plan.
But I’m not going to do that.
Why? Because our attitudes to planning ahead in business are equally as important. How we think about planning is something we all need to consider before we even put pen to paper.
I spoke to someone recently about the idea of business planning, and she made the point that she didn’t plan or set goals because she was too afraid of failing. I understand that – why set ourselves up for a perceived ‘fall’ if we don’t have to?
But what if we flipped that mindset on its head? Let’s view business planning as a way of setting a direction. Of knowing where we want to get to and why we want to get there. And of the places that we want to stop off at on our journey? Then, if we view business planning as a journey, every step forward is a part of that journey – which will, we guarantee, have bumps in the road and stormy weather. But those bumps and storms are just events that shake things up for the intrepid entrepreneur. They are not failures. They are opportunities to learn, change course if needed, and then to continue to make progress.
So as we move forward through this blog about planning ahead in business, read on with this in mind.
So how far ahead should you plan?
Most of us will be thinking about planning ahead to some extent – your January sale, for example, or the launch of a new product. But these are tactical plans, not strategic ones. With strategic planning, we are looking at the bigger picture – not at particular events. So where do we start?
- The first step is to project forward FIVE years and think about where you want to be. Your personal definition of success is key here. Do you want to be retired in 5 years? Have made a certain amount of money? Or perhaps you’ll have more time then so you actually want to be working more? Then capture that as your ‘big’ business goal
- The second step is to think about where you need to be in THREE years time (if you are going to achieve that 5 year goal), and then capture that as your medium-term goal.
- Finally, the third step is to think about where you need to be in 12 months if you are to be on track for your year 3 goal.
To give you a simple example, you might decide that your big goal is to achieve £50,000 turnover by the end of year 5. Therefore, you need to be planning for around £30,000 by the end of year 3, and £10,000 by the end of year 1, if you’re looking for consistent growth.
In planning ahead for your business, it’s not enough to stop at your big strategic goals as outlined above. When goals are ‘too big’, the Imposter Syndrome can creep in quickly and we start to panic or procrastinate, or both! So we need to take each of those goals – Years 1, 3 and 5 – and break them down. Do this, and things become far more manageable and infinitely less daunting!
So taking our year 1 goal of £10,000 revenue as mentioned above, let’s assume we already have our website, raw materials and so on, in place. The question (and the focus of our plan) then becomes our customers, their needs and wants, and our subsequent sales forecasts. At the beginning, a lot of this data is based on assumptions – for example, if your business involves getting mums of primary age children to events without their children, you can probably expect sales to tail off in July/August, before picking up again in September. If you run a fitness business, sales will probably be strong in January, but be lower in the latter months of the year. You can then use these assumptions/sales data to plan what you need to do across the course of the 12 months that will enable you to achieve that £10k.
Taking things a step further, you might decide that you want/need to outsource certain tasks in year 3 to help you, for example, to manage increased production requirements or to allow you to run additional events. By planning ahead, we can predict when these points will come, and most importantly, when the expenses incurred will ‘pay for themselves’ through an increase in revenue!
Plan ahead, and then things change…
This final point brings us back to our attitudes to change and to perceived ‘failure’, as mentioned above. Your plan is accurate on the day that it was written (assuming of course, you’ve based it on facts and research!). After that, things will change. I guarantee it.
There will be months where you don’t quite make your forecast numbers (and that’s ok – the most important thing to consider is why this was, and learn from it!). Equally, there will be months where you achieve way more than you thought. There will be opportunities that come up that you hadn’t anticipated, and bumps in the road that you don’t foresee. This is completely normal and completely expected. At these ‘stopping off points’ on your journey – whether they be good or bad – go back to your plan and amend it. Learn from each stage of your journey, adjust your course, and continue on your way.
But always come back to your year 1, year 3 and year 5 goals (broken down into smaller, more manageable tasks of course!).
We would love to hear more about your Year 1, Year 3 and Year 5 goals in your business, so do let us know in the comments, or reach out on social media. But if planning ahead in business is something you struggle with, let us help! We can work with you on an individual basis, or you could attend one of our quarterly business planning workshops! You can also read more about business planning as a whole in The Definitive Guide to Starting a Small Business.