The SMART way to grow your business

The old saying ‘if you fail to plan, you are planning to fail’ has never been as relevant as it is in today’s fast-paced business environment, where change is constant and competition is fierce.

Despite widespread acceptance that planning provides a valuable focus for an organisation and gets people pushing together in the right direction, many businesses continue to overlook the importance of it.

In fact, recent figures from market research company DBM Consultants highlighted that 77% of Australian businesses don’t have a plan in place. This is likely to be the main contributor to high failure rates among Australian businesses in their early years, in particular, small to medium-sized operations.

Why planning is important

As well as providing focus and direction to your business, a plan helps you clearly identify your business goals and how you will set about achieving them while considering all the potential resourcing requirements and roadblocks you may face along the way.

At the same time, a plan is going to give you the opportunity to step back and look at what’s working in your business, and what you can improve on. Involving employees in the planning process is another way to gain valuable insights.

Remember that planning is also going to be vital when seeking finance for your business. Lenders and investors aren’t going to risk their time and money if you don’t have a roadmap showing how you’re going to be successful and profitable.

How often should you plan?

Ideally, planning should be done on an annual basis, so you’re continually checking-in and reviewing the last 12 months, as well as re-setting your focus for the next year.

The new financial year is a good time to undertake planning and review how you’ve performed – what worked well and what didn’t? Did your business stay on track with your previous year’s goals? What threats and opportunities did you face?

Undertaking an analysis of your businesses’ strengths, weaknesses, opportunities and threats (known as a SWOT analysis), will help you create specific and measurable goals. You don’t have to come up with a long list of items for each, but between 5-10 key points under each of the main banners will give you a good snapshot of the landscape for your business in the next 12 months.

Think SMART

The next step is to undertake a structured approach to developing your business goals for the next 12 months. There’s no point putting in place business goals that are broad, ambiguous and hard to measure, or worse still, unachievable.

Developing business goals using the acronym SMART ensures you are thinking more carefully and methodically about what you want to achieve, and the goals are realistic. It’s also a good idea to seek input or feedback from your employees on the business goals you develop, ensuring they have buy-in and feel motivated to work towards them.

Here’s the main things to consider when using SMART business planning.

1. Specific

If you set specific goals, there’s a higher chance you will be successful in achieving them. Clearly define your goals by asking:

What do I want to achieve?
Why is this goal important and what are the benefits of accomplishing the goal?
Who will be doing what to ensure the goal is achieved?
Where will the goal be carried out?

2. Measurable

Ensuring your goal is measurable will enable you to track your progress towards it, as well as know when it’s been achieved. Define a benchmark so that you know when your goal has been accomplished: Some questions to ask include:

What are the sales and conversion targets?
Are there other areas you can measure like enquiry levels, market share, or add-on sales?

3. Achievable

Your business goals need to be achievable, otherwise it will be hard to ensure you and your team remain motivated to achieve them. In particular, consider the costs -especially if you are a small business – by asking:

Do I have the resources to achieve the goal?
Do I have staff with the capability to achieve the goal?
Do I need to hire more staff?

4. Relevant

To ensure your business goals are relevant, choose goals that are meaningful to you and your business and that are achievable in the current business climate. Ask yourself some tough questions, including:

Is it worth the costs and resources required?
Is this the right time to be doing it?
Is it in alignment with other goals?

5. Time-bound

It’s important that the business goals you come up with have a time frame for completion, which will establish a focus and sense of urgency. Consider breaking each goal down into a more manageable time frame:

What can I do today?
What can I do in two weeks time?
What can I do in a month’s, two months and six months time?

Planning is critical to the success of any operation in today’s competitive business environment. Using the SMART framework when you next plan will ensure you’ll avoid wasted time and energy chasing goals that are unrealistic or unattainable.