Six Steps To Plan A Better Business In 2023 (and beyond):
Many are predicting 2023 will be more or less a continuation of the last couple years - full of challenges. A recent term, “permacrisis” - as in, we are all in a constant state of permanent crisis takes on considerable meaning when planning a company’s goals and activities. Not that we’ve seen it all, but we’ve certainly seen a lot AND continue to manage through crises like inflation, recession, COVID, wars and expensive capital.
For all that may ail the entrepreneur, manager, founder or CEO - Let’s revisit a few basics and review a handful of tools to use to plan out the year.
Here are six steps to plan a better business in 2023 (and beyond):
Step1: Start with the BIG PICTURE - Unfortunately, when businesses get rocked by uncertainty leaders often take their eye off long term targets, goals and the vision of what’s to come. Leaders may want to pair down some efforts in challenging times, but not so much that they lose sight of why they’re “in the fight” in the first place. With your team, take the time to review the organization’s long term vision and values and make sure that whatever is planned presently, ladders up to that vision. Timelines may need to be adjusted, but not so much that a disconnect develops between the long term goals for the organization and this year’s annual plan. If after reviewing, it seems that a disconnect is present, a revision may be in order.
Step 2: SWOT it Out - Old school maybe, but I still advise clients to perform a SWOT analysis during planning periods. SWOT stands for strengths, weaknesses, opportunities, and threats and can help leaders outline what they know about their organization - both good and bad. It might seem rote but doing the work, using the SWOT tool, alongside a talented team allows for analysis and discussion to bubble up into the planning process that might not have occurred otherwise.
Step 3: Get SMART - Determine the goals for the organization. Working SMART (Specific, Measurable, Achievable, Realistic, and Timely) creates goals that influence day to day actions and achievement. Further, developing SMART goals, along with your team, naturally creates a clear feedback loop for all members to perform their best. Some examples of SMART goals could be: Revenue or profitability growth ($’s or % over last year), employee retention rate, lowering COGs as a percentage of revenue, getting a new product to market - whatever it is, in 2023, account for it clearly and make sure it is SMART, as resources are going to be tight this year.
Step 4: Use your Keys - What are the Key Performance Indicators (KPI’s) that can properly track the organization’s progress towards goals in 2023? With KPI’s I stress with clients that they need to clearly communicate how they ladder up to the company’s goals. Additionally, be careful not to KPI your team to death such that they can’t see the forest through the trees. Keep the list short, don’t make the tracking burdensome and allow teams the appropriate amount of time to develop. A trend takes time to develop and has potentially many factors. Be patient and all for KPI’s to develop information over time before decisions are made that impact the company.
Step 5: INITIATE action - Next, outline the initiatives to achieve goals decided upon and prioritize each of the team along with the team. Developing the right initiatives that will help achieve the organization's goals, within the confines of the resources available is critical. Collectively you might determine that one or two initiatives relied on in past years will continue and likewise the team might come up with a handful of initiatives that are more creative or less “tried and true”. One note here - more initiatives might simply be more (not better) and may harm the success of the team achieving the overall plan. Keep it tight and bet on what the team is most confident to execute on in 2023. Given all that is afoot in the macro economy and the resources available, too many initiatives can lead to a failure in execution.
Step 6: STRATEGY is king- Now, build out the strategy(ies) to meet the priorities. A simple example below might look like:
Keeping it simple, say a goal for 2023 is to increase revenue from $12M to $15M/year. Breaking out historical 2022 figures a bit:
~$12M/year in revenue.
On 2,400 transactions.
With an average transaction size ~ $5000.
Generating an additional $3M in revenue over 12 months averages out to an additional $250,000 in revenue each month. (Obviously, this is discounting the cyclical nature of some businesses and ramping up different initiatives) - But you might consider:
At $5000/transaction, that’s an additional 50 transactions per month, 12 to 13 transactions each week and therefore 2 to 3 transactions of $5000 every day.
Considering your current business is already doing 200 transactions a month - that means you need to scale to 250 transactions of average size each month.
Going further, consider the company’s resources - such as, each salesperson needs to shoulder an additional # of sales of x $’s.
When planning marketing initiatives, consider each campaign needs to deliver X number of leads potentially for Sales to close.
Further still, if you know the average number of leads generated from Marketing, along with the closing rate of Sales, you can quickly determine how many leads needed to be successful to reach the companies goals for 2023.
Finally, I wouldn’t call this a step but always, “Wash, rinse, repeat”. Once implemented, the above steps should be revisited over set a timeframe. Make adjustments, tweaks as needed. New information will come in all the time, adjust to it accordingly. As you refine each item within the output of each of the steps, repeat them until you build a successful process. Strength and success comes from learning and making mistakes but only if you adapt from them.