Business needs to be nimble in today’s fast fashion, fast news, fast culture. The classic 5-year Strategic Plan, now 10 years past its prime (HBR, 2014) is today more of an anchor for growth than engine.
At SLC we use a simpler, more relevant approach to guiding businesses through modern business cycles, with their modern economic and labor realities. It’s short, sweet, to the point, and most of all, highly effective for our clients. Using a 2-year time-frame forces a hyper-attention and priority on a series of achievable, short term goals. Shorter time-frames support frequent wins and consistency in completing the tasks needed to reach destination.
Most important, effective planning needs effective strategies to be both successful and sustainable. It is truly a collaboration between 3 strategies all working together for support…
...The Three C’s.
Customers: The business development Strategy
Capacity: The people strategy
Cash: The financial strategy
When all three strategies are in balance, you will have a working business plan with the tools to bring it to life. At SLC Advisory Group, we grow our clients' businesses, and with this abbreviated framework we want to give you some tools for you to grow yours, too.
The Framework
●Business Development Strategy ●People Strategy ●Financial Strategy
To make a plan, we first need a destination.
To identify the target to aim for, we start with the question, “What is the ideal state of the business in the next two years?” What would success look like for the Mothership, the Ownership, the Employees?
Now we need a find a path to travel by. Understand the gap between what we are today and what we want to be tomorrow: “What is the gap between the current state and the ideal? What’s missing? What’s Extra? What’s perfect already?"
As with every journey, it begins with a single step (completed task). “What are the tasks that are needed to close the gap?” For example, “What needs to be done. Who needs to do it? Who is going to be accountable and be sure it gets done?”
Also with every journey we need to know how much food to take (financial reserves), and we need to set the right deadlines to make sure we don’t run out. From our annual goals, we can reverse engineer our quarterly, monthly, and even weekly. We can estimate our needed working capital.
These goals then become the foundation for driving the “Three C’s,” the first of which is always customers. When we understand our customer strategy, we can understand the capacity the Mothership will need to develop with the correct strategy to deliver our products/services, and with the quality and consistency they expect. Last, when we understand the capacity we need to meet our customers' needs, we can finally create financial strategy that ties the strategy for Services/Products to the strategies for:
the inventory, people, and systems that we need to produce/deliver them.
the time we need to deliver within while maintaining quality and consistency.
the amount of money we need to generate/borrow/spend to make it all happen.
The Customer Strategy
Customer strategy for the following 2 years revolves around answering the following questions:
Product: What products can/should we offer that our customers want or need to solve their challenges? What do we offer that is no longer relevant?
Message: Does our messaging about our products or services resonate with the customers we want at the volume we need?
Geography: Does our geography allow us to capture enough customers to support the needs of the strategies and business model for the next 2 years?
The Capacity Strategy
Capacity strategy for the following 2 years revolves around answering the following questions:
Inventory/Systems: Will we have what the customers want in stock? Are our systems robust enough to be consistent in our quality of delivery of product/services?
People: Do we have enough of or even the right people to serve the number of customers we want, or to provide the level of services we will offer?
Time: Can we provide the products and/or services within the time-frames expected by our customers?
The Cash Strategy
Cash strategy for the following 2 years revolves around answering the following questions:
Price – What is the amount of money customers will pay for our products within the time it takes to provide them/complete them?
Gross Profit – Is the price we can charge for our products/services enough to to support the needs of the Mothership and the employees?
Net Profit – Is the money left over after running the Mothership enough to support the needs of the ownership?
Closing Thoughts...Quality.
The quality of a song is not governed by an ability to read notes from a sheet of music. It comes from the understanding of how a note should be heard in relation to the all the notes around it. Should the note be louder? Softer? Maybe a little behind the beat?
In other words, the quality of the song will only be as good as the quality of the musician playing it.
Business planning is no different. The quality of the strategies will only be as good as the quality of the people running and participating in the process. The quality of the questions being asked. The quality of the information be supplied by the team. The quality of the diplomacy needed to bring everyone involved to consensus at the beginning, during, and most of all, after.
The most important consideration for the success of this framework (or any for that matter), is who will be completing it.
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