Have a Plan

by Brian on April 27, 2011

Have a plan… any plan… as long as it’s something to follow.

It really blows my mind at how many people are in business for themselves but have no plan.

“What’s a plan?”

A marketing plan… a business plan… a plan of action… a piece of paper with some scribbles on it planning out your business’ future.

If you don’t know where you’re business is going, it’s going to fail.

“It takes money to make money.”

I recently had a chat with one of my clients and when I asked him why he wasn’t doing something the right way/ but doing it half ass, he told me it’s because it would cost him $400 a year to implement that strategy.

I tried to explain to him the $400 a year he spends will make him 100 fold of what he would have to invest.

Still he looks at spending money as a “cost” and not an “investment.”

Most business owners I speak with have a hard time grasping this concept.

“What’s the difference between a cost and an investment?”

A lot of business owners I know don’t have a problem stopping at their favorite coffee place every morning and getting a fancy coffee drink and a bagel for a cost of $10. There is no return on that money spent. The coffee and bagel isn’t going to make anyone any money back on what was paid. This cost averages out to about $200 a month.

Spending money on advertising is an investment… Hopefully with the money spent on advertising will make not only the initial investment back, but more money on top of that too.

It amazes me at business owners balk at me suggesting they spend $100 a month on advertising… let alone $200, $300 or heaven forbid $5,000 a month.

Just because you own a businesses doesn’t mean you know how to run it…

There are all sorts of statistics over the Internet that say anywhere between 70-95% of all small businesses fail within their first 5 years. I believe the later.

Just because you own the business doesn’t mean you are going to be the best person to run your business. If you don’t have a plan on how your organization is going to grow, you are setting yourself up for failure.

  • Just because you’re a good bartender doesn’t mean you would be a good bar owner.
  • Just because you’re a good cook or server doesn’t mean you will make a good restaurant owner.
  • Just because you’re a bicycle enthusiast doesn’t mean you’ll make a good bike shop owner.
  • Just because you play the guitar like SRV doesn’t mean you would successfully run a concert hall.
  • Just because you’re good at whatever doesn’t mean you will make a good business owner for that.

Just because a person is good at doing a specific task doesn’t mean they are good at running a business. Running a business requires a completely different set of skills. The fact of the matter is, the skills needed for running a business are pretty universal. A 30K per year business should be ran like a Fortune 500 company.

People should be put into positions they are qualified to be in. This sounds like it should be common sense, unfortunately it isn’t.

Most business owners (who are in their first 5 years) tend to promote people because they are doing a great job at a position. For example a customer service rep who is doing very well may get promoted to be the customer service manager. These jobs, while related, are completely different and require a completely different set of skills. A person should not be promoted unless you are certain they have the set of skills needed for the position.

I know one company whose department head quit. The department head was an experienced  lawyer. Instead of putting a person in charge of the department who was qualified, they promoted her 22 year old (finishing up school) administrative assistant to the position of department head (because “she already knows how the department runs”). I don’t discriminate based upon age, but I would discriminate based on experience when it came to putting a person in charge of a department that was responsible for customer service and bringing in millions of revenue. Unfortunately the owners of that company weren’t that bright and the company ended up going out of business, because of the catastrophic failure of that department. That company, if the owners would have pulled their heads out of their asses, would be a super thriving business today and would have dominated their industry.

Any business owner who promotes a person into a management role solely because that person is doing the staff role well, in my book is a moron. The most common fatal promotion I see are business owners who takes their top salesperson and makes them into a sales manager solely because they are the top salesperson.

While promoting from within is great… business owners have to realize that just because a person is good at doing one thing doesn’t mean they’re good at doing something else. Placing and keeping people in positions they excel at just makes sense. Promoting people and changing their roles because they are good at their current position is fine as long as you are sure they not only can perform the task of the new role, but that they actually want the position too.

If you don’t have a plan… here’s one for you…

Plan to spend money to make money and plan to put and keep the right people in the right positions in your organization… If you don’t, you will fail.

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