As I was getting involved in the business, but still working in my previous corporate role, I started to collect a list of questions about things I thought were important to understand about the business. I then started to group that list into themes and focus areas and went in search of a lot of information, to see if the data told the same story that I was observing, and hearing from others.
Once I started managing the business, though, it was easy to get really swamped by all the things that I needed to do. For my own sanity I had to organise all of those thoughts and concerns into a simplified framework that I could use to hang things together and give my to-do list some context.
So my basic approach has been something like this: gather information, form a view, gather more information, test that view, then take time to get my head around the current state of affairs - figuring out what we do well, what are the root causes for issues and things like that. I then balance that with a vision or goal, and define the areas we need to focus on.
For me, I've been trying to find a balance between objectively addressing the things that are in front of me right now, and defining what I want to achieve and prioritising and defining a road map for that.
What does your plan contain?
I've got a one-page version, which every team member has a copy of, and that's also displayed on a wall that everyone walks past every day and is where we have our fortnightly meetings. It basically defines the areas of focus for the business, and the goal for each area. Under each area there are also one or two 'current focus' items that we swap out as things get done.
I also have a more detailed version of the business plan that spells out the objectives for each focus area, defines the metrics and KPIs. Then there is a long action plan, or to-do list, on a spreadsheet categorised by the business plan focus areas and objectives.
Why is having a plan important to you?
Personally, it creates a framework that I can hang my thoughts and ideas on. Being new to the business, having a business plan has also been helpful to talk about direction and get support from accountants, lawyers, the bank and others.
I think it's also important for communicating the direction of the business to staff. I would probably have lost a couple of key people if I hadn't shaped a picture of the business and shared it with them. When people know what our goals and priorities are, it helps them when they're making decisions as well as understand why we are doing some of the things we are doing.
What do you find challenging about the process?
My biggest challenge has been prioritising, and deciding where to focus first. I have to accept that I can't get it all done in six months. What also adds to that tension is being in a business of this size that has an operating rhythm that's very day to day.
So I try to make sure at least some time is set aside to reflect on the overall plan - usually at the end of the week. Having simple and defined 'focus areas' within the plan means I can see progress is being made, which provides some reassurance.
How do you make sure your plan is relevant when circumstances are changing?
As I've been developing our business plan, I've treated it like a theory, so I tend to filter new information against my business plan, and see whether it fits in, expands, focuses, or invalidates parts of my plan. Having a plan provides a reference point to evaluate opportunities against. That's meant things that I might have otherwise dismissed or said I'd look at later, I've recognised as an opportunity and jumped on sooner.
What three pieces of advice would you have for other small business owners about business planning?
1. Work with someone on it. Having a sounding board is very helpful, and setting time aside to work on it keeps you accountable.
2. Make it so you can connect the plan to both the bigger and smaller pictures. You need to connect your business plan to the bigger questions like where do you want to be in five years, as well as to your daily activities and weekly objectives.
3. Use data. Having metrics - and not just financial ones - provides context, builds feedback into the system, helps you understand what is driving outcomes, see trends as well as look into the detail of what is happening right now.
Coming up in Small Business: New Zealand Fashion Week is in full swing. So what's it like to be a small Kiwi fashion brand with big global ambitions? How are you getting where you want to go? If you've got a good story to tell, drop me a note: nzhsmallbusiness@gmail.com
