As the last couple months of 2021 approach, it's time to start thinking about how to reach even greater heights next year.
One thing that never changes is the fact that having a great plan for your organization is essential. Even after you open your doors, you’ll continue to analyze, tweak and perfect that plan in order to improve operations. With the pandemic creating so much uncertainty, building a plan for 2022 may feel more difficult than in the past.
However, there's some good news. Sticking to a few key points will take some of the edge off.
1. Identify your assumptions and biases
Most business plans are built around at least a few assumptions. For example, you might assume that you have to follow a specific set of regulations or that you’re the right person to run the organization. One thing I’ve learned in the investment world is that even though cycles repeat, nothing ever goes strictly to plan. What you assumed will happen can be very different from what actually happens.
Take a look at your assumptions from the previous year. What held up? What didn’t? More importantly, why didn’t they hold up? If you can answer that question, then you can avoid repeating the same mistakes. If you’ve never built a plan before, then try to identify the biases that could create problems. In either case, give yourself some breathing room and remember that life happens.
2. Look at your results
Sometimes, your results are very different from expected. This is not necessarily because you did something right or wrong, but it can be because there are so many moving parts involved. Look at what you ended up with, and let those results give the business some direction. For example, if you find that people bought twice as much of a product as you thought they would — and market conditions and attitudes haven’t changed — then it would make sense to invest more into that product for the upcoming year. Be discerning about what actually caused your results to know whether they’re anomalies or real, long-term trends for the company. But don’t start blind.
3. Create some projections
Projections tell people what you’re committed to. For instance, you might say you’re going to spend $500,000 on advertising or $1 million on Project A. That’s very attractive to investors and shareholders who want to know that you know where you’re going. In one of the companies that I started, these kinds of projections helped me find partners. If you’re both honest and bold enough, your projections can mold your circumstances and influence the support you get.
Projections also acknowledge foreseen issues and anticipate circumstances to keep you prepared. To demonstrate this point, when I started a small business in the FinTech sector, I didn’t project that I’d need more funding. I didn’t look at what would happen if the stock market really took a dive. I just assumed that everything would work. When venture capitalists asked how it would work financially under different scenarios, I didn’t really have an answer for them. When trouble hit, I had no plan for how to survive and the business went under. If I would have outlined what to do in different scenarios, then I might have been able to keep my doors open.
Always look at your best and worst-case scenarios, work with different people across departments, and create projections that paint a realistic picture of the company.
Business plans have to be somewhat fluid because both the market and the world change incredibly quickly. Be ready to respond and pivot. You can apply these same three points every time you need to create a plan for your organization. Just start early, define who you are, and make your commitments. The sooner you can clarify your identity and intentions, the faster great things can happen.
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