Small business owners aren't known for being great planners. That's because small businesses tend to react more than they plan, or they created a plan 10 years ago and haven't revisited it since. Such an approach may have worked well in the past, but today -- in the aftermath of the global recession -- the business world is different. Many small business owners are wondering what to do to sustain or regain their past success.
Believe it or not, there has never been as much opportunity for small businesses to create new products and services, as well as grow their companies, as there is today. Even though we are surrounded by a fog of bad news regarding the economy and a slow jobs recovery, there is a mountain of great opportunity right in front of us. We simply have to blow away the fog to see it. Planning -- using the science of certainty -- is the key to getting rid of the fog.
Over the course of my career, I have started six companies -- three of which were national leaders in the first year. So I know what it's like to start a small business and grow it rapidly. Here are the planning keys I used to be successful.
1. Start with certainty
Whenever I did business planning, I always started with certainty because strategy based on certainty has low risk and high reward. So in a world of uncertainty, the first step to planning is to ask yourself, "What am I certain about?"
Certainties fall into two categories: hard trends and soft trends. A hard trend is a projection based on measurable, tangible, and fully predictable facts, events, or objects. A soft trend is something you have the ability to change or influence. For example, saying that Baby Boomers are aging is a hard trend -- it's a definite certainty. But saying there won't be enough doctors to treat aging Baby Boomers is a soft trend -- it's something people can control and choose to address or ignore. In other words, a hard trend is something that will happen: a future fact. A soft trend is something that might happen: a future maybe. Therefore, to begin your planning:
• Make a list of all the hard trends that are taking place in your industry, so you know what you can be certain about. Eliminate from this list anything you are not certain is a hard trend.
• Make a list of all the soft trends taking place in your industry, so you can see what you can change or influence.
• Ask yourself: What do I know will happen in the next few weeks, months, and years? And how can I innovate to take advantage of what I now know for certain about the future?
You can use the power of certainty to identify, plan, and profit from future trends long before your competitors do. Just look at Apple, who accurately saw the trends of accelerating bandwidth, processing power, and high-capacity storage and harnessed them to create the megahits iPod, iTunes, iPhone, and iPad. Meanwhile, Polaroid, Kodak, and Motorola spent years clinging to analog models as their competitors triumphed by grasping the arrival of the digital age. Can small businesses see the future and profit from it as Apple did? Yes, but only when they start their plans with certainty.
2. Identify the problems you're likely to have
Once you get rid of the uncertainty, you can anticipate what's coming and move forward faster. In other words, rather than just reacting -- what small businesses do best -- you need to make sure your plan includes spending at least one hour each week identifying the certainties and problems you are about to have.
Therefore, based on the certainty of hard trends, use this time to ask yourself the following questions:
• What problems will my company be facing in the next few weeks, months, years?
• What problems will our customers be facing?
• What problems will my spouse, my children, and my friends be facing?
• What is my ideal future five, ten, fifteen, and even twenty years from now?
• What are some of the steps I could take to shape that future now?
Then, look for creative ways to solve those problems before they happen so you can not only plan your future, but also shape it.
3. Plan for transformation
One thing I know for certain is that we're no longer in a time of rapid change, but of true transformation. What's the difference? Changing means continuing to do essentially the same thing, only introducing some variation in degree. Build it a little bigger, smaller, faster, higher, longer. Increase the marketing budget. Add a few staff to the department. Transformation means doing something utterly and radically different. In the early 1990s, Barnes & Noble superstores changed how we shop for books. By the mid-1990s, Amazon was transforming how we shop for books, which then transformed how we shop for everything.
Transformation is actually a good thing, because it means tremendous opportunity to small businesses -- if you plan it correctly. Therefore, part of your planning includes asking yourself these two key questions:
• Using certainty and hard trends, how can I expect my own field or business to transform in the next few years?
• How can I give my current and future customers the ability to do what they can't do but would want to -- if they knew it was possible?
Your answers to these questions will help you start planning strategies to transform how you sell, market, communicate, collaborate, and innovate. Remember, no one asked Apple for an iPod or an iPhone.
4. Think of new ways to compete
Realize that transformation is happening right now. It's a hard trend. The soft trend is whether you will plan to reinvent yourself and redefine your business based on the transformations happening, or be a victim.
One way to transform is to understand that there are many ways to compete. Most companies compete on price. The problem with competing on price is that it means lower margins, meaning you need high volume to make up for it. If your intent is to be a competitor of price, then fine. Just realize you have many more options. In addition to competing on price, you can compete on time, reputation, values, technology, image, service, design and many more.
As you plan, make a list of different ways to compete and ask yourself, "Do I have a strategy for every one of those different ways of competing?" Most companies compete in only one or two areas and have a detailed strategy for both. But few compete in all areas. To gain an advantage, you want a strategy for every area. Detail how you are different in each area so you can transform and truly stand out.
5. Envision your future
Ultimately, you have to direct your own future...or someone else will do it for you. That means once you can see where the future is going, you can use the direction of change to your advantage to create change from the inside out, rather than crisis manage all the time with change coming from the outside in. This is the skill at the heart of planning: the ability to project yourself into the future and then look back at your present position from the future's point of view--what I call your futureview. This futureview is not the same thing as a goal, ambition, or aspiration. Futureview is not what you hope for or are trying to create--it is the picture you actually hold, for better or for worse, of what you expect and believe about your future.
Becoming aware of your own futureview puts a tremendously powerful strategic tool in your hands. It gives you the controls of your own future. Your futureview determines which actions you'll take, and which you'll avoid taking. Different futureviews create different realities. Therefore, part of your plan must include not only shaping your futureview, but also that of your employees, business partners, suppliers, investors, and customers.
Most companies put zero effort or energy into directing their people's futureview, which means for all practical purposes, they put zero effort into directing their future. All the traditional "strategic planning," "scenario planning," and other systematic approaches to designing an intended (read: hoped-for) future often fall short of the goal. That's because in a world of technology-driven transformation, they are increasingly less affective. Designing a better future requires a clear focus on managing people's futureviews.
Remember, your futureview determines the future you. The vision you have of your future determines your behaviors, which determine your outcomes. In a very real sense, your futureview is everything. And yet it is something people seldom think about.
Plan Now...& Succeed Later
Having a plan for your small business is the key to success. By committing to these simple yet powerful planning strategies, you'll keep your company and yourself ahead of the curve and on the path to an increasingly profitable future.