If you were to visualize your business in 10 years’ time what would it look like?
Specifically:
- How much revenue will it generate?
- How many staff will you have?
- Where will your premises be located and how big will they be?
- What products and services will you offer and what problems will they solve for your customers?
- What will your role be – a technician? Manager? Non-working shareholder collecting dividends?
- How much profit will the business be making for you? How much do you want to earn, and how much money will you need to support your preferred future lifestyle?
Working with clients on this visualization process can be challenging. Many business owners do not have a clear picture in their minds of what they are aiming for, and therefore have difficulty setting clear and detailed goals. In fact, many businesses owners sort of ‘fall’ into business without having a burning desire to build a business. For example, a competent technician is working for a large company that decides to close down the area of the business that the technician works in. The redundant technician starts a business and continues to service the old customers.
There is a rather cynical saying: “most business owners take aim at nothing and hit it with tremendous accuracy.” Unfortunately, I think that’s true for many small business owners.
To assist clients with visualization I find it is effective to start with analysing the current financial performance of the business and showing clients how much profit and cash it is producing. Then I explore with the client how much profit and cash they want to earn. From there we work backwards to size the business in terms of how much revenue it will need to produce to achieve the desired profit and cash result to suit their current – and future – lifestyle. It then becomes easier to build the picture by inserting all the missing pieces of the puzzle with the end result being a very clear plan of how we are going to get there. And yes, I say ‘we’ because as accountants we are there with our clients each step of the way, making sure they stay on track and successfully navigate the unexpected.
Having a plan is a revelation for many business owners but it is of no use if it is not implemented. Paying a consultant to help create a plan is no silver bullet. Failure to implement can be like a bad habit that must be broken – by investing in yourself, having the right mindset, deploying effort, being passionate about the goal and being accountable to someone for the results. In short, it is hard work, especially on the part of the business owner. But like the old saying, you reap what you sow.
Contact us on (09) 839-0087 to find out more about how we can assist in business planning and goal setting.