Running a Business

Running a Business

3 Steps to Prepare for Growth
by Henry McCabe

see My Sep. 14th Sun Column

I've yet to meet a person running a small business that does not want to grow sales and profits. If you want to grow, follow an orderly process to put into place the changes needed to bring that about. Here is where to start. As you read on you will think that is a lot to do for a small business. It is, but worth it if you really want to grow.

Step 1. Write mission and vision statements. Mission and vision statements are the means by which you define what you want your business to accomplish. The terms are often used interchangeably, but as I use them a mission statement has an external focus and a vision statement an internal focus.  A mission statement describes what it is that your business will do for your customers. A vision statement describes what it is that your business will do for you. They should be simple and direct. Your mission statement should describe the product or service you sell and how it will benefit your customers. Your vision statement should describe your aspirations for the size and profitability of your business and how that would benefit you, your employees and your vendors. One to three sentences each should be sufficient.

Step 2. Evaluate your current situation. In order to make a plan for the future, you need to critique where your are now. That way you can identify weaknesses that stand in the way of growth and strengths that will support growth. Both can be found within the business and outside the business.  Internal elements that should be assessed are marketing, sales, operations and finances, and the management of all of those. External  factors are changes in product demand, competition, regulation, channels of distribution and sources of supply. You can perform an internal and external assessment  by using a checklist or questionnaire covering critical elements of each topic. Two other techniques are SWOT analysis- a grid assessing strengths, weaknesses, opportunities and threats; and PEST analysis- a grid assessing the political, economic, social and technological environment. Variations of these can be found in books or on the internet or you can look for future blogs on this right here.

Step 3. Prepare strategic and tactical plans. A strategic plan sets forth goals for your business to achieve over the next five to ten years in specific, measurable, action oriented, realistic and timely terms. It fleshes out the mission and vision statements for the business with specific qualitative and quantitative goals to be achieved over specific time frames. A small business can set forth its strategic plan in a one or two page memo including a few tables. It should be updated every few years. A tactical plan sets forth specific actions to be taken during the next one or two years to accomplish the strategic goals and describes the results of those actions.  A ten page memo including tables and financial projections covering marketing, sales, operations, finance and management should be sufficient for a small business. It should be updated every year.

Planning. The only thing we know for sure about any plan we make is that actual events will turn out to be different. That is why we must learn and adapt as events unfold.

Definition Quiz. What phrase describes how products or services get from a business to a customer?

Answer to last quiz: Marketing