 Your business plan calls for a five percent increase in sales next year and another five percent the year after that. Why? Your five-year plan calls for an average annual increase of four percent each year. Why?
Many organizations add up all of their cost, pick a target income level and then determine how much of a sales increase they need to “make their plan”. This is often done without really understanding or accounting for unforeseen increases or decreases in marketplace changes and opportunities because most organizations find it difficult to “plan for the unknown”. In some respects this approach makes sense since history is often one of the best predictors of future performance.
What the percentage plus approach does not provide for is an opportunistic culture that focuses organizations on being able to maximize potential unforeseen situations as they arise. By planning for a constant percentage increase the expectation is often for only slight or marginal sales improvements. The focus on slight or marginal improvements leads to safe but small ways of thinking about the business. If you expect a three percent increase you are likely to only get a three percent increase.
One of the best challenge questions a business planner can ask is “How can we double our business?” This single question more than any other challenge, forces people to think about the business in a totally different fashion. Rather than thinking in small increments it gets people to question every method and function of doing business. Things like production flow, channels of distribution, and customer targets all get challenged. Simply adjusting the status quo and repeating the same year with minor changes is no longer acceptable.
By learning to think big and instilling an attitude of constantly looking for ways to dramatically grow the business, organizations can more easily identify opportunistic business situations when they arrive. This attitude should be reinforced not just during the annual planning process but also in regular monthly meetings and in the course of everyday operating practices. This approach should not take away from getting the business basics done but rather it should compliment and enhance how every point of contact with customers and potential customers takes place.
While it is true that the ability to “plan your work and work your plan” leads to more predictable outcomes it can reduce an organizations ability to take advantage of unusual opportunities if the organization holds to rigidly to their plan. It is often from so called “lucky” unpredictable opportunities where major business advancements often come.
A wonderful definition of luck is where preparation meets up with opportunity. By being prepared for and constantly looking for opportunities organizations are much better able to take advantage of them when they do arrive. This means being able to fund unbudgeted expenditures, making fast (but informed) decisions and adjusting people and other organizational resources on the fly. In today’s rapidly changing business environment the organization that is prepared for opportunity will be the luckiest.
Is your organization prepared to accept opportunistic success when it comes? Do you instill a culture of constantly looking for ways to double your business? Is your organization constantly looking for new customers new channels of distribution and new product opportunities?
About the Author – Scott Francis is President of Topline Development LLC a Strategic Marketing Consulting Group that provides helps companies determine how they can make the most amount of money with the least amount of resources. To learn more about Topline Development LLC visit their web site at www.ToplineDevelopment.com or contact Scott directly at scott@toplinedevelopment.com. |
