In December many businesses find themselves busy with year-end sales and shipments, holiday parties, tax and inventory considerations, and many other priorities. Finding a little time to plan for the New Year can put you in control in 2018. Create an operating plan now to map out the priorities for 2018. Many small business owners think this is too difficult or complex, but here’s an outline for a simple, 5-step process that creates a 1-page operating plan that many small businesses have benefited from.
Step 1: Business Environment. This is an assessment of the current state of affairs from 5 perspectives: Customers, Suppliers, Competitors, Industry, and Economy. Just list a few key trends for each category to get a sense of what’s happening at present.
Step 2: Senior Management Objectives. List what you really want to achieve in 2018. It’s useful to group these into categories as well; Financial, Business Development, Capabilities, and People cover most everything. List 2-3 Objectives per category.
Step 3: SWOT Analysis. Honestly assess your Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses refer to internal areas; Opportunities and Threats refer to external forces. You want to develop Opportunities into Strengths, and fix Weaknesses. Some Threats are to be avoided; others are not in your control, and you must learn to deal with them.
Step 4: Business Model. This is a highly-simplified Profit & Loss Statement to stimulate thinking about financial goals; to align Objectives with profit drivers; and to find funding for the operating plan. An actual Income Statement can be used for ‘current state’ data; but develop how you want this to look a year from now.
Step 5 – Operating Plan (a 1 page table). Compile a table with Objectives in column 1. Include input from the SWOT Analysis. Then make additional columns for Strategies, Tactics and Goals (quantified Objectives). Strategies and Tactics enable the business to achieve the Objectives and Goals. List no more than 1-2 items in each table cell. Then assign a single person as “accountable” for each Objective – and it’s not always the owner! Last, prioritize the top 3 Objectives; what you absolutely must do during the year before turning out the lights on Dec. 31, 2018.
This type of plan is easy to communicate within your company. Refer to it at least quarterly in 2018 to see if you’re on track, and to make adjustments. Business consultants with the UGA Small Business Development Center are skilled at helping you develop an operating plan, as well as working through challenges with marketing, finances, human resources and operations. Please call on us for confidential, no-cost consulting if we can be of service.
Written By: Bruce Cutler, UGA SBDC Gainesville Area Director