Successful Business Strategies: Plan for Success in 2005

By Rhonda Abrams

Happy New Year! You have many goals for 2005: Make more money, have more loyal customers, get more satisfaction from your work. One simple thing can greatly increase your chance of success -- developing an annual plan.

Each year we create an annual plan in my business. We do our planning in late summer -- when things are fairly quiet -- but it's appropriate to do an annual plan at the beginning of the year.

The result of our planning? Our sales more than doubled last year; we have a clear sense of where we're going and how we should spend our money. As importantly, we can actually measure our progress.

An annual plan can be a fairly formal process -- like the one we do at The Planning Shop -- or it can be much simpler. Set aside a few hours or a day to work on your plan. Get away from the office, store, and especially phones.

The key is to take a look at where you've been, where you want to go, and the best way to get there. Here's how to develop your own 2005 Annual Plan:

-- Look at the Past: Before going in new directions, see what's worked for you and what hasn't. In particular, identify which activities have been the most successful in terms of profit, not just income.

-- Define Your Business: Yes, I know you've been running your company for a while, but it's critical to really understand your business. What are your core competencies? Who's your target market? Who are your competitors? What's happening in your industry?

-- List Your Goals: List all your goals -- how much money you want to make, products or services you want to add, new marketing approaches, changes in operations. Look at whether you need to add or change selling channels. Are you too dependent on one customer or channel? Include personal goals that affect your work life.

-- Get Specific: Now go over your list and make the goals very specific. Let's say one of your goals is to increase business. Decide whether that means more customers, more income per customer, or both. Then, list the number of customers you want, what type of customers, and the target average sale per customer.

-- Develop Steps: Identify the steps necessary to achieve each specific goal. For instance, to attract more customers, you'll need to increase marketing. List the ways you'll do this: advertising, trade shows, direct mail, cold calls. How many times? Where?

-- Estimate Money: Put a dollar figure next to each step. Estimate.

-- Estimate Time: Things don't just take money; they take time. Next to each step, estimate how much time it might take. For instance, writing a newspaper ad may take two hours, while exhibiting at a trade show may take 40 hours preparation and five days for the show and travel.

-- Estimate People: Figure out who will be responsible for each step and how many people will be needed. This gives you an overall sense of the total "person-hours" necessary to achieve your goals.

-- Prioritize: By now, you've got a list that would take more money, more time, and more people than you have. So prioritize your goals and steps. Start with your "bread-and-butter" business -- the things that keep your doors open. Next, choose those with the highest probability of success. Eliminate some goals entirely rather than attempting them all half-way.

-- Reality Check: Look over your list. Does it fit with how you and your employees truly behave? If you plan seems overly ambitious, it probably is. Go back and re-prioritize.

-- Get Consensus: Discuss the plan with all affected parties. Do they agree it's realistic? Are they willing to commit to it? Getting everyone on board improves the chance you'll actually achieve your goals.

Finally, turn these priorities into an Action Plan and budget. Put target dates with each step. Write down your financial goals and budget on paper, in a software program, or use the electronic financial templates available on my Web site (www.planningshop.com) to create an annual budget.

You'll find that Annual Plan is a great roadmap for success. Remember one of Rhonda's Rules: "You can't reach a goal you haven't set."

Copyright, Rhonda Abrams, 2005

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Rhonda Abrams is the author of The Successful Business Plan: Secrets & Strategies, which has sold more than one-half million copies. Her two newest books, Six-Week Start-Up and What Business Should I Start?, both made Nielsen BookScan's Top 50 Business bestseller list. Abrams is the founder of The Planning Shop, publisher of books for entrepreneurs to start and grow their business, distributed by PGW. To register for Abram's free business tips newsletter, visit www.PlanningShop.com.