What does your SMART plan look like?
In my prior post, I talked about preparing your business for growth as the economy picks up speed. As our chief economist has said recently, the economy is improving, and whether you are in ice cream or lumber or software, whether you’re a one-person web-design firm or 100-person manufacturer, I would encourage you to create a strategic growth plan and keep it handy on your desk or iPad or pinned to your wall.
One strategic planning approach that I’ve found effective is what I call a SMART plan — Specific, Measurable, Action-oriented, Results-focused and Timely.Specific: Although we tend to associate “strategy” with “broad” and “general,” the truth is that to be effective a strategic growth plan needs to be very specific. Specific in all regards — specific timeframes, detailed data, defined goals, and specific actions for achieving the desired results. Measurable: At Bank of the West we strive for our business decisions to be data-driven. We also rely on data to measure results. What indicators do you have to measure your past and future performance, and in particular your performance compared to competitors or to the market?
Consider what indicators are important to you. Look at your customer trends to see if you’re attracting new clients or losing existing customers. Is your goal to increase sales volumes, or expand profit margins? If you want to improve margins, you’ll need data on your costs, and you’ll need price data to determine if you have pricing leverage. Do you have information on high-end markets you may be able to enter or expand in?Action-oriented: Your growth plan should contain steps that will be implemented over a defined timeframe. Of course, you can be flexible and make modifications as you proceed, but all good plans focus on action. A useful approach is to keep asking “How?” as you drill down into your plan. For example, if you plan to increase sales 15%, ask how. By expanding into two new metro areas. How? By contracting with an outside sales team. How? Etcetera. Results-focused: What are the results you want? Increased sales, deeper relationships with existing clients, faster inventory turns? Keep your plan objectives front and center. If you’ve done a SWOT analysis (as I discussed in my previous blog post), how do those strengths, weaknesses, opportunities, and threats jibe with your plan and the results you expect to achieve? Timely: Your plan needs to be timely in two regards. It needs to be relevant to the market and economic conditions in which your business is operating today and that you anticipate. Your recession plan, for example, is probably not what you need for today’s growth economy. Second, your plan needs a timeframe, with mile markers — perhaps it is a one-year plan with quarterly or monthly interim targets to get you to that end goal.
A SMART plan is just one approach to developing a growth strategy that is realistic and achievable.
Next, I’ll talk about some practical tips for creating a plan. How do you find time? Where to begin? How long should it take to develop a plan? Who might be able to help you?
Have questions? Let me know.