As I wrap up this quick series, I want to talk about how to make Business Plans work for you. Many times, people write them and then stuff them in a drawer. This means that the exercise has some value but is not fully realized.
The way to make this activity a part of your business is through the metrics that we talked about. Revenue and Profit are two metrics that are important for every business. Beyond those, there are 2 - 3 numbers that you want to track. When I was with AFC, one of those numbers was the number of DSL ports that we sold each quarter. We were in the process of converting our business from being primarily POTS (Plain Old Telephone Service) to being primarily broadband DSL. So, we wanted to be clear our growth in that area. When I was with Edgewave, we wanted to move into larger customers. So average customer size was a metric that we tracked. Note, that neither of these numbers is directly Financial. Even better than those result numbers was one number we used at AFC. That number was the dollar value of RFPs that we received. We had a pretty good view of our market share. This meant we could project our revenue and track our market share.
How do you do this for yourself? My best suggestion is not to make these numbers 3-level much like a Red Light. Green is good, Yellow is warning, and Red is danger. Using this 3-level system, you know where to focus your attention and be prepared to adjust your actions. One downside is that there will be a desire to adjust the level to be Green all the time. The idea of this system is not to change the goal. The idea is to change the actions that you take to ensure you make your goal. Back to one of our metrics at AFC, Salespeople were given targets that meant we would make our DSL expansion goals. What we found was that there were challenges in the retrofit of existing systems to support DSL. We created upgrade packages to simplify these retrofits. From there our numbers took off. Without setting those goals, we may have never known what the problems were.
One way to ensure you are not changing your goals is to engage an outside advisor. I offer this as a service, but more traditionally this is the role of a Board of Directors. The idea is that you have one or more people interested in your success but not invested in your plan. That means that they can remain objective as the plan progresses. This outside perspective can make a difference. Many companies fall into the trap of believing their own ideas without challenge. By having a constructive critical analysis, you can sharpen your views on how to make your plans more effective. If you ever want this type of service, feel free to contact me.
Have a great day!
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