Plan Your Future
It is the Saturday before Christmas- I am sitting at home, it is
snowing out with expected accumulations of 15 to 20 inches (snow
is not the norm in Northern Virginia), the tree is not decorated,
we have guests arriving on Monday for the week, the girls'
Nutcracker performance is delayed until January 2 (thankfully),
none of the gifts my wife bought are wrapped, and most
importantly, I have not completed my Christmas shopping. This is
not the way I planned.
We bought the tree on December 2; it should have been decorated by
now. My wife started the Christmas shopping before Thanksgiving,
so we should have the gifts wrapped by now (guess who was supposed
to do the wrapping -hint: not the one who did the shopping). She
planned to spend tomorrow, Sunday, baking cookies for the week
ahead, and I expected to have time on Sunday to go out with my
daughters to do some Christmas shopping for the baker. With the
snow, we will be lucky to get out on Monday, after work and my
daughters' school, just as the guests arrive, provided they get
out of New Jersey. What a mess!
I share my experience with you, not because I lack planning skills
(I don't), but because it brings to light the importance of
planning, especially business planning. I am confident that with a
little extra stress and aggravation, all that was planned will be
in place by the 25th and we, my family and guests, will have a
very enjoyable holiday.
If you look at our situation, at least we knew what we had to do,
what we wanted to accomplish, when it needed to be accomplished
by, and what resources were available ( I failed to mention this
earlier because for some reason the resources available and the
amount spent is not matching up, but that's a different story).
Anyway we had a plan. Knowing the important details will enable us
to complete all that is necessary and we will enjoy the holidays
as a result.
Business planning is not much different than knowing what you want
to accomplish today, this week, this month or beyond, how to
accomplish it, and what resources will be needed. But it is a very
important process. A process that is necessary for any business to
grow, to improve, or to survive, and it is one that we, Strategy
Development, often find is overlooked by businesses In the
Document Imaging Industry.
For those who do prepare a business plan, it is usually a wish
list of goals to accomplish. It has no resemblance to what
opportunities exist (industry projections), what skills the
organization has, what weaknesses must be improved, or what
resources are available (both financial and human capital). In
most cases, it is a document slated for the credenza, file cabinet
or trash shortly after it is completed because it was not well
thought out, was not realistic, or did not give any consideration
to both internal and external factors affecting achievability of
So what is required to prepare a well-constructed business plan?
In this case more information is better than less. It starts with
gathering and reviewing historical records. Understanding what
transpired and why, what was a normal event and one that might not
be repeatable, looking at trends and productivity, and
understanding the reasons behind the improvements and changes to
the organization. You need a thorough review of the past in order
to be in a position of planning and constructing a plan for the
Next, you need a SWOT (Strengths, Weakness, Opportunities, and
Threats) analysis. This is a review of the strengths and
weaknesses of your organization (internal factors) along with a
review of the market opportunities and external threats to your
success (external factors). This review is critical for preparing
a realistic and achievable plan. Without knowing what you face and
what skills are in place to address this, how can you prepare a
detailed plan? The SWOT analysis gives you the necessary insight
to support the preparation of a quality business plan.
Finally, you need to identify three to five goals for the New
Year, and no more than that. Too many will dilute the
effectiveness of your plan and increase the chances of not
accomplishing anything. The three to five goals should be
department, product or services specific. They need to match the
direction the industry is going and your ability (skills) to
achieve that goal. An example of this for an equipment dealer
might be to improve the overall profitability of the service
organization and increase the service gross profit from current
45% to 48% by improving parts management (specific and achievable
with a detailed plan.)
An example of a goal that is probably not realistic or achievable
would be to grow equipment revenue 10%. What's the difference?
In the first case, the goal indicated a weakness in performance -
part management- that was affecting the gross profit of service,
and by improving an area of weakness controlled by the business,
they could improve the overall profit performance in service. This
was well within their reach.
In the second case, you are looking to grow an area of your
business that by all known industry projections is declining, and
declining at significant rates. So unless there is a reason
outside the norm that your efforts will gain significant equipment
revenue, this goal is not realistic or achievable. In a declining
market, you need to expand your market rate, i.e. market share, at
a rate equal to the amount the market is declining in order for
revenue to match the previous year without any impact in the
average selling price. For example, if the market is expected to
decline 10%, you need to increase market share 10%, and as long as
the average unit selling price does not decline (which is not what
the industry analysts are forecasting), revenue would be about
equal to the previous year. So growing revenue 10% in a market
declining 10% would mean you would need to grow market share 20%.
Is it realistic to plan the organization around achieving such
growth in today's tight economy and highly competitive industry?
For most companies I would think not.
A well constructed and detail-focused business plan takes time. It
involves a great deal of thought and understanding of the internal
and external factors we face, it involves engaging all members of
the organization in order to be effective, and it must be
realistic. But it is critical to the success of any business
If your organization prepares an annual plan, don't shortchange
the process. Invest time and resources in getting a well
constructed plan in place. It will pay dividends for your
organization and will provide a road map that you and your team
can follow throughout the year. If your previous plans were
ineffective, then review the plan to understand where the
weaknesses exist in the preparation process following the
important steps mentioned above.
If your organization does not prepare a plan, you should start
now. We live in a highly competitive industry. Success cannot be
left to chance; you need to plan and identify the direction your
organization needs to take in order to combat the downward trends
of the industry and survive. Start small, i.e. one or two goals,
but start now. The longer you wait, the more unexpected challenges
you will face that could impact the success of your business. If
you need help, attend the BTA Business Planning Workshop.
Information can be found at www.bta.org under the education tab.
Ed Carroll is a principal of Strategy Development, Inc. an
advanced management consulting firm, engaged in sales leadership,
managed print services, operational efficiency, service
productivity and business planning. Clients include equipment
manufacturers and resellers (large and small) focused on equipment
and service in the document and imaging industry throughout North
America. Ed can be reached at 703.722.2973 or