On our last show James and Megan talked about the importance of building your business on a solid foundation, and how that starts by gaining perspective in your planning process. You’ll need to have solid Mission Statement and Core Values to guide you into the next phase: forecasting your future.
Why is forecasting critical to your planning process?
- We’re talking about the future here, and no one has a working crystal ball or time machine (yet).
- We cannot fully predict the future, but we can make informed opinions about how we think things are going to go.
- The nature of planning is that we are setting out to create something in the future that does not exist yet. There’s an element of guess work.
- But if we can decide where we want to be, we can influence our actions to take us there.
What is needed to do a good job forecasting for your business?
- First, it’s healthy to dream. Tap into your desires of where you want to go and why you started this process in the first place.
- Make sure whatever you come up with aligns with your mission and core values. If it doesn’t, go back to your Mission and make it fit your Vision, or find another Vision.
- Document specific Business Objectives as well. What needs to be accomplished for this to be a worthwhile endeavor?
- Financial viability is also very important, so don’t forget about it. A high-level review at this point is good enough, but you’ll need to go deep and see if this concept can eventually stand on its own financially.
How do you plan for an uncertain future?
- This process is about eliminating as much uncertainty as possible. It will always be there, but it doesn’t mean you have to stare into an abyss and risk everything on your gut feelings or do nothing and hope for the best.
- You need a vision for the future.
- It can be a vision statement, but we prefer a narrative style as described in this Inc.com article byAri Weinzweig: http://www.inc.com/magazine/20110201/creating-a-company-vision.html
- Document where you want to be and what you want your life and business to be like in 3-5 years. Don’t skip over or rush this process. Do the work. Once it’s good, write one for 1 year out and 90 days out.
- Make it tangible and realistic, but stretch your possibilities.
- The plan you are building will become actionable soon based on this process. Do it right and share it with others.
- If you get stuck, talk to a coach, mentor, partner, etc.
- Define Business Objectives around five Key Results Areas (KRA’s): People, Process, Profit, Product, and Promotion (a tip from Chuck Bowen)
- Every objective must fall into at least one of the five areas, and all areas should be addressed.
- Make them tangible and measurable. Often they will require about a year’s worth of effort, though some will be shorter or longer.
- They must also align with the Mission, Core Values, and Vision. Everything needs to be aligned!