Take one step at a time

Tuesday, March 31, 2009

Q. Why should I bother spending any time on a strategic plan when, in these tough times, I have so many day-to-day fires to put out?

A. The quick answer: If you don’t know where you’re going, you’ll probably end up somewhere else. You can’t really afford to run your business without a strategic plan.

In today’s economy, businesses typically look to simplify things, whether it’s their business process or their overall cost structure. Why not take the same approach to your strategic plan, as well?

We are so programmed to think of strategic plans as 20-page tomes that take months to prepare and, in the end, become a document no one ever reads. We miss the basic purpose of the plan - to establish longer-term business goals.

Simplifying your strategy means starting with the most basic of all goals: namely, your ideal exit strategy.

If you are an owner, do you want to sell your business for $5 million in 10 years? If so, write that goal down right now; it’s the first step in your strategic plan. Next, write down what your ideal annual profit distribution would be from now until your exit? You would be surprised by how many owners cannot answer these two basic questions.

I bet you didn’t know that two simple, time-defined goals could serve as your basic strategic plan. From now on, when facing significant future business decisions, start by asking yourself: What best helps me achieve my strategic plan?

As a golfer lines up at a tee, he aligns his shot by focusing on a distant target. His objective is not necessarily to hit the target with his first shot; it’s to get him a little closer to the hole. In strategic planning, the idea is the same. If you know your ultimate goal, it’s easier to plan the shots necessary to get you closer.

Don Davis is an industry consultant. Reach him at 412-805-0662 or edondavis@aol.com.