In my years of experience, both in business and as an educator, business owners who experience financial difficulty either want the “magic silver bullet" for a quick fix or attach themselves to the “next big thing” for quick returns as the usual answer. To resolve the issue and move the business to the next level, one must think transformatively, following the process where both time and compounding of positive strategic actions can be beneficial. With this being said, what percentage of business owners build a bridge for transformative success? Candidly, it is about 50-50. What places the odds in one's favor of achieving sustainable, recurring success in business?
Of course, a sound financial system that provides guidance in decision-making is critical. This is all interwoven with your short-term goals (less than one year) and long-term goals (3 to 5 years). Goal setting is a very useful endeavor to guide decision-making and provide focus on priorities.
Produce a written operational plan
An overlooked component behind the success of a formal plan for resolution or moving the business to the next level is a well-defined, written operational plan. Even the best business owners fail to do this. The Executive Program for Agricultural Producers (TEPAP) held at Texas A&M each year has producers and businesses from over 25 states, Canada, and other foreign countries. Dick Wittman, a highly respected agricultural consultant, conducts his annual survey of participants. This year less than 50 percent of attendees had a written operational plan compiled into an annual report. Another 28 percent were developing it. One-quarter of the participants had not started on an operational plan, but realized it needed to be done.
A written operational game plan in the areas of production, marketing, financing, risk management, human resource allocation, and capital purchases is critical to support the cash flow projections and the overall written business plan. This operational plan is the substance behind the transparency and the accuracy of cash flow and profit planning outcomes. The operational plan can be imperative in establishing guidance, a term often used by Wall Street businesses in testing various scenarios in a dynamic marketplace and economic landscape.
Don't delay, plan ahead
As a business consultant, I get frustrated by business owners who are not responsive and do not emphasize this component of planning. Often, they are fixated on what is urgent. In other words, they focus only on planting, harvesting, and feeding livestock versus what is important such as planning for long-term success.
If written and accessible, the operational plan can be a very useful reference guide and an important resource for institutional memory. In businesses that are in transition, the operational plan provides the institutional memory that can provide guidance to the next generation of owners and managers. Finally, the peak performing owners and managers not only develop the operational plan, but they execute and monitor various components throughout the year. The question becomes, which of the 50-50 are you? It is extremely important to be on the positive side with business owners who complete an operational plan.