Two words could save your small business from Anne Marie Bonneau on Vimeo.
If you want to grow your small business, sooner or later, you’ll hear the following advice: “Work ON your business and not just IN it.” In other words, step back from day-to-day tasks and look at the big picture of why you’re doing what you’re doing. One of the best ways to do this can be summed up in two words: “annual plan.”
Every year, in January, I urge entrepreneurs and small business owners to develop an annual business plan for the coming 12 months. Please—get out of your office, shop, or factory and take at least a day to evaluate your strategy, market, operations, and priorities for the coming year.
Developing an annual business plan helps you succeed. It saves you time, saves you money, and it might just save your company.
It saved mine. Today, I own a “content creation” company. But my company didn’t start out as one.
In the dot-com boom, I launched an Internet company aimed at reaching the small business market. I’d raised angel financing, hired a great team, and had cool offices in the heart of Silicon Valley. More importantly, we had secured partnerships with leading corporations, including Microsoft, FedEx, and Compaq Computer. We were headed for success.
I had a small side business, too. Years earlier, I had written what would become the best-selling business plan guide in the US. Originally distributed by another publisher, I had recently purchased the rights back and published Successful Business Plan: Secrets & Strategies myself.
By fall 2001, almost all our initial funding for my new company was spent. Fortunately, we were about to have an influx of cash. We were scheduled to ink a big deal with Compaq Computer, and another Fortune 100 company was close to signing a major deal.
Then, early on the morning of September 11, 2001, my team and I were at the Compaq headquarters in Houston, TX. On TV monitors, we watched images of the Twin Towers falling. Everything stopped.
Reeling in shock and horror, we went back to our hotel. In the next two days, we’d learn that business in America had come to a screeching halt, and both our big deals were frozen. My company was coming to an abrupt end.
Doing some rough calculations, I realized my book sales could keep me and a couple members of my small team on the payroll for a short time. We needed a new vision—a new business plan.
And that’s what we did. Once home, we spent days developing a business plan for a publishing company.
Business planning helped me survive.
From the start, we scheduled annual business planning sessions—usually in January—to make sure we were responding to any changes, opportunities, threats facing us.
A few years later, during an annual business planning session, we realized that 90 percent of our income came from one book distributor. That made us vulnerable if anything were to happen to that distributor. We devoted our annual business planning session to decide how to diversify. We evaluated our sales, realizing the other 10 percent was coming from the college and university market. So we devoted resources to developing that market further.
Wow, was that business planning session important! At the end of 2006, our book distributor went belly up. Fortunately, we were able to stay afloat because we had diversified. Once again, business planning helped me survive.
The ups and downs of business continued. In 2008, the economy fell off a cliff, and publishing fell along with it. During our 2009 annual planning session, we brainstormed about how to respond. We called it our “spaghetti year.” We’d throw everything we had against the wall—and see what stuck. Business was chaotic; everyone had to work extra hard. A lot of things “stuck,” and we’re still here.
Yet again, business planning helped me survive.
What does the future hold? In our recent annual planning sessions, we’ve evolved from a “publishing company” to a “content creation company,” transitioning from physical books to other products and services. And for our just-completed 2015 Annual Planning session, we even brought in a consultant to help.
Annual planning has helped my company survive and thrive. Every year, we’ll continue to develop a 12-month roadmap: you can plan on it.
Copyright, Rhonda Abrams, 2015
This article originally ran in USA Today on January 23, 2015