By the time you read this, 2011 will be winding down and 2012 will be right around the corner. A fresh start! A new year! Bold New Year’s resolutions! No more mediocre business, average income or sluggish business and employees! It all changes in 2012! Sound familiar?
With all beginnings, there is optimism and excitement. New beginnings create a chance for renewed purpose and accomplishment.
At this time of the year, many business pundits and columnists will wax profound on the need for every business owner to create an annual business plan and budget. How can you run a business without a road map? You wouldn’t think of taking a road trip without a destination in mind, would you?
Some business gurus will even insist a five- or even a 10-year business plan be written in great detail. How many trucks? How many employees? Which markets will be served? It goes on and on. One-year plans are only for those who lack vision. Look out into the future and see your life as you want it and then make it a reality.
Have you heard these futuristic vision quests? Do you feel a little inadequate when you realize thinking ahead one year has been a waste of time, never mind five or 10 years? I understand.
Is it wrong to have a business plan and budget - even a five- or 10-year plan? No way! It’s great advice. Before you embark on creating a detailed budget, or start to pen out a five- or 10-year plan, remember the harsh reality of business. Ninety out of 100 written budgets and business plans end up gathering dust on the shelf 60 days after they are penned. Once the year is complete, the actual performance of the business bears no resemblance to the desired plan. That’s not being negative; it’s the truth.
Most business owners have written a business plan and budget at least once and found the activity to be a waste of time - or at least an activity that did not help them much. I have lost count of the number of times I have asked a business owner if he has a budget and heard a variation of this answer, “I do one each year (or usually) and I never seem to come close to what I budgeted, so I quit looking at it.”
Why does virtually every business owner write a budget and business plan at one point in his life, yet never achieve the budget and business plan he has created?
Lessons From AcademiaMy daughter and son are now in college. Their four-year undergraduate studies will, I hope, culminate in degrees for each of them. When you sit down and look at the individual classes they need to take to graduate, it is daunting. They need to learn a second language, take advanced mathematics, business management, computer studies and marketing. It makes my head spin.
But when they start college, they do not work on everything at once. They take a semester of classes - four to five classes in about 100 days - and build toward their degrees. They complete one semester, register for a new semester (a new 100 days) and off they go again. They attack their degrees 100 days at a time.
Now let’s think about how the typical business owner may go about it. He writes a business plan describing how his business will look at some point in the future and then creates a budget detailing the financial performance of that future business. The business plan may have some general description of the key strategies and tactics. Then, it is off to work.
In most cases, it is a recipe for failure because the initiatives are too broad and the roadmap too vague and too far in the future.
He has written a plan that tells him what degree he wants, but it has none of the semester-by-semester detail on how he will get to his budget and business plan.
Eating My Own CookingMy role here at Nexstar is changing. By the time you read this, I will have moved from the role of coaching manager to president. It is a very exciting time. One of my very first chores has been to prepare a 2012 budget and business plan. Our fiscal year starts on Nov. 1 - the same date I assumed my new role.
I have been working with our outgoing CEOGreg Niemiand the rest of our staff on the budget and business plan. It was done about 45 days before the end of our fiscal year, which is good timing to get a budget completed. Now I have a budget I must carry out and a general business plan on how to do it. Yikes! It is a lot easier to write about this stuff than to actually do it.
One of the great things I did in preparation for this new role was work with a business coach, who helped me think through the different issues I had to address when I took over the senior staff position. I have been a business coach and now I have a business coach.
As we discussed the concept of the first 100 days and how important they are, my business coach noted that, once the plan is written, focus on the next three months and get that plan going. Wonderful advice.
At Nexstar, each department head created a 100-day plan as it relates to accomplishing his or her budget and business plan. No five-year starry-eyed visions into the glorious future. Let’s all agree on first things first, put them in writing, make our commitments public and then get after it. I like that.
Your First 100 DaysLet’s get back to why your budgets and business plans never came to life and were not accomplished. Did you detail the actions you needed to take 100 days at a time, put them up on the wall and work each day to knock the items off your list? Once done, did you then create a new 100-day plan and repeat your success? Or did you just write everything you wanted to accomplish on paper, put it in a notebook and then go to work each day?
Did you share your business plan and budget with your staff and get their buy-in and enthusiasm? Did you have managers detail their 100-day plan for their areas of influence in your company? Or did you not even share the budget with them?
Don’t feel bad. That is how 90 percent of the world does it.
The great news is that in 2012, it can all change. The table on page 30 is a simple way to organize your to-dos.
Think about your business as a 100-day-at-a-time organization. Keep goals specific and measurable, and don’t try to do too much. You’ll be well on your way to accomplishing your budget and business plan 100 days at a time.