Starting a business is a huge achievement. But maintaining and growing your business is an even bigger challenge. So as 2016 winds down, here is the first step in a five part process to help you plan for the year ahead.
“If you always do what you’ve always done, you’ll always get what you’ve always got.” ―Henry Ford
Following Henry’s advice, you need to begin the planning process by looking in the rear view mirror! Start by taking a look back at the business year you just completed—even if that is only a partial year. You won’t know what you should be considering doing in 2017 until you understand how you did in 2016.
“In God we trust; all others bring data.” —W. Edwards Deming
Hopefully you were able to capture good data. All available data should be gathered together in preparation for review for all aspects of the business—sales and marketing, operations, finance, etc. It is really hard to plan without good information.
If you find that you don’t have accurate or timely data, or if you don’t have any data at all—make data acquisition a priority in 2017! Consider working with a bookkeeper, accountant, or consultant to help you define your data needs and data collection mechanisms. Or consider implementing a CRM (customer relationship management) software tool. But keep in mind that not all data is created equal. So make sure that you are collecting the specific data that you need to provide insight into your business.
Once you have gathered your data, you need to begin to interpret it. The goal is to gain insight and thereby information from you data.
First, focus on what worked, how it worked, and how you plan to implement more of those techniques in your upcoming plans and strategies. How to do that? Ask yourself such questions as:
- What happened in my business over the past twelve months?
- Make a list that highlights your achievements by month.
- Make a list that identifies the challenges you faced by month.
- What were the actual business results?
- What did you do to generate new leads or customers?
- How was your referral business?
- Was new business up, down or flat?
- What percentage of new business were you able to close?
- What percentage of existing customers did you retain?
- What was the return on my marketing investment?
- What was the mix of your products and services?
- What was the size of your average job? Did it change?
- What about the competition?
- What changes have they made? Are any gone? Are there any new ones?
- What have my customers been saying? Do my customers know about us? Do I know what my customers value?
- Does my brand support by business vision and goals?
- What did you never get around to doing in 2016?
- What were your business priorities and goals in 2016?
- And any questions directly related to your industry, sales cycle, product, etc.
Then ask Why? And keep asking Why? For example, you discover that sales were down in 2016. Ask your Why? where sales down. If your answer is simply because customers did not buy as much product . . . this is not a very helpful answer. Determine which customer niche was down and / or which products did not sell as expected. If the customer did not buy from you who did they buy from and Why? Has there been a change in consumer demand for the product or service? What are the industry trends for this product or service? Keep asking Why? On average, 5 ‘Why?’s’ get you to a root cause.
If you get to a ‘Why’ question and find that you don’t have any objective way to answer it, then stop and:
- Get help. Making a planning decision based on missing, incomplete, or subjective data is not going to increase your chance of success. Reach out and get help finding the answer.
- Define what data you would have needed to collect to answer this question for yourself, and add it to your planning process.
When you look at your business results and ask “Why”, you can determine if something worked or if it didn’t quite meet your expectations. And even when you have something that worked, you need to ask yourself ‘Why’ will it continue to work in 2017.
Having reasoned out the business successes and the failures in 2016, you’ll be able to consider solutions which you can put in place to positively influence your business in 2017. These considerations create a solid foundation on which you can start building your 2017 plan.
Need a bit of help? Just call me or send me an email. I can be the objective set of eyes that you need to understand your business performance last year AND at the same time help you identify and evaluate changes you should consider implementing in 2017!
Next week, we move on to industry challenges and trends!