It is no secret that the over-arching goal of planning is to improve your odds of success. I know you’ve heard it a thousand times but as we begin a brand new year, now is a great time to take stock of where you stand with regard to your plans. Plans fall into these two broad categories each of which can be further broken down into short and long term plans.
Both are related but, the most important by a long shot is one’s personal plans and goals. For business owners, building a successful company is truly just a strategy for achieving his/her long term personal plans. But, for many owners the business itself becomes everything. It occupies almost every waking moment of thought to the exclusion of personal goal setting and planning which, if you stop to think about it, is really odd since the reason business owners work so hard in (and on) their businesses is to achieve personal goals. But, if personal goals aren’t quantified with a plan for attaining them then all that hard work on the business may not create the wealth that was intended. Unfortunately, many business owners fall into the trap of thinking there is always tomorrow to create a personal plan and they don’t realize that part of the planning process is creating strategies for protecting wealth that is created in the business. Tomorrow never comes. Do it today.
I’m sure you also know that it is simply not enough to have a general concept in mind of what you want from your business or in life. Goals need to be defined in clear specific terms, in black and white, on paper using language that is quantifiable and measurable. And, they need to be worked constantly. If that isn’t done then how will you ever know if you are making progress towards your goals? If an owner is to be successful in life, he/she must know what that means in concrete terms. So, here we are at the beginning of 2012. What are your personal and business goals for: next month, the 1st quarter, this year, the next 5 years???
The risk of not planning and working your plans is failure, pure and simple. Things might look rosy today but do you have a plan for the unexpected that could occur at any moment (good or bad)? Do you have a plan for who would run your business should you become incapacitated? It is wonderful to say something like this – my plan is to build my business and sell it to my competitors when I turn 40, 50, 60, etc. But, that assumes you will be around and healthy at those milestones, that your business will be viable without you and, that your competitor will even want your business then. It also assumes the business will actually be worth what you think it will be worth which very often (yes, very often) is not realistic.
So, how can you significantly increase your chances of being successful? Well, here are three ideas:
- Build your business around a well-defined set of goals and a well-conceived business plan. Create and manage to a budget. Make these items an integral part of your daily management process. And, ensure that your internal processes are sound, efficient and well controlled.
- Plan for the day you will leave (or exit) your business; keeping in mind that for many that day is not a matter of choice. Things happen that are beyond our control. Will you be financially and emotionally ready for that day whenever it comes? That’s the $64,000 question (oh, if it were only $64,000!).
- Surround yourself with people who are smarter than you. Find a good CFO who can help you create and implement your business and personal plans. Other key advisors you will need include, but aren’t necessarily limited to: a strong management team, a CPA for tax reporting, an attorney and, a wealth advisor. Then recognize that what they do for you is an investment in your future and not an arbitrary expense.