As business advisers, we have the occasion - the pleasure - to speak with business owners every day. By in large, this is an extraordinary group of individuals. Consider what they have done, what they started, what they have built. It’s the true American Dream, is it not? To create something that one is uniquely qualified to create, to manage the minefields that have presented themselves, and to ultimately be left standing with titles that can’t just be printed on business cards: owner, proprietor, creator, founder. These accomplishments have taken a striking combination of intelligence, courage, strategy and passion.
However, there has been an undeniable trend that we have found over the past couple of years. It is likely that if you are a business owner reading the previous paragraph, the words might have helped recall how you once felt, but those ideals seem more distant now than ever. It’s not that your business is failing, but you know that just because you are not failing doesn’t mean you are succeeding - at least not at the level for which you once strove. Rather, the trend that we see every day among business owners is that everything - everything - seems to be a little bit more difficult now than it was five years ago. While there is a sense that we are through the worst of the economic challenges, the bigger challenge is the lowering horizon of what best-case scenario has become. Things are a little better, but the problem is that they are only a little better - and the “smart money” is that they will continue to get just a little better.
The key to strategic planning in today’s business environment is to initially focus less on the environment and more on you and your business. Go back in time - not five years to the “good ol’ days”, but to those gloriously sleepless nights when you were so excited about that idea that you were formulating. Go back to the “you know, I think this could work” moment - to your peaks of professional passion. Force yourself to not ask the question “why am I doing this?” in the negative sense, but ask it in the reinvigorating, inspirational sense. (By the way, the answer is not “to make money” - that is a result, not the foundation and inspiration that gets you out of bed every day).Remind yourself. You might find that through dozens of individually small and seemingly inconsequential decisions and movements you have veered off of the course that you set for yourself, and it’s time to get back. You may find that while you are still on course your goals are now different, so some change in course is required. Regardless, the first question absolutely has to be “why am I doing this?” From here, the specifics of the planning process can start to take shape.
Going through this process will take the focus off of where we see many business owners initially tend: Sales. Very often we hear an owner suggest some version of: “if we could just increase sales, then everything would fall into place.” Clearly, there is almost always so much more that goes into the equation. The most important financial factors and metrics are not based on how much you sell, but how much you keep. Far too often success is measured by the growth of top-line sales. While this metric may very well be indicative of positive performance and trends, it simply is not the metric or indicator of financial health of sustainability. Said another way, what is most important is not how much you sell, but how efficiently you can sell that amount.