You probably remember this quote from Lewis Carrollâs fairy tale, Alice in Wonderland. When I hear this I always think of Ted -- my first sales partner and early mentor at IBM. Ted was the consummate IBM salesman and I learned much from him. But when I asked him a question that wasnât focused or didnât consider our sales goals he would respond by saying, âif you donât know where youâre going, any bus will get you thereâ.
What he was saying was if you donât have your end game in mind or if you donât understand the basic issues involved in your pursuits. the decisions you make donât really matter. That premise is just as true today At A Cut Above LLC, my custom woodworking business, as it was when Ted and I were trying to sell computers to GE.
The 'OOPS' Method
I established a rudimentary business plan when I formed my woodworking company using the âoopsâ method of planning I learned back then. âOOPSâ was the easy way to remember and implement this important process.
O â Objectives: Set clear and measurable objectives to be met by a specific time.
O â Obstacles: For each objective why canât you accomplish it right now? Write down all the obstacles blocking you from your objectives.
P â Priorities: Arrange your Objectives from most important to least and arrange the obstacles similarly.
S â Solutions: Starting with your most important objective, write down the specific actions you (or someone on your team) will take to overcome the obstacle.
Typically, a plan like this is developed in a forum that includes most, if not all of the folks whose responsibility it will be to implement the solutions. In a small shop of under 10 people it could be everyone. In a larger shop maybe itâs just the managers and foremen.
The theory is, that while the plan is being developed everyone is âequal;â that is, no matter what your position your ideas are important. Through discussion you attempt to reach a consensus decision to define the objectives, obstacles and solutions. If all goes well and everyoneâs ideas are represented in the plan, then everyone critical to the success of the plan are in agreement with it.
This process may not be realistic in your environment. In my small shop there simply arenât enough people for me to go through this process. I set the financial business plan for the year and identify the major challenges that are inhibiting me from achieving my annual goals. Then I put together a âhit listâ of accomplishments I need to complete during the year in addition to meeting the basic revenue and expenses objectives.
Case in Point
As an example, two years ago -- just as the economy began to go tilt -- I realized that my cost-of-goods-sold was creeping up compared to my overall revenue. I evaluated my costs for my major suppliers and began to work with them to lower costs. I was surprised that so many were willing to offer better pricing if I changed the way I ordered. Some didnât. In those cases I found new suppliers.
The point is that without the planning process I wouldnât have necessarily focused on the issue at that that time. Iâm glad I did though. By reducing my costs in this way Iâve been able to mange my business through a very difficult time.
Each Monday morning I have a brief but focused dialog in the shop that spells out what my expectations are for the week ahead, i.e. the production plan. That gives me the opportunity to get feedback and discover why the plan may not be possible because of obstacles such as material shortages, tools down, etc. Then, I can go forward and clear the path so the work can get done on time (prioritized solutions).
You may be doing something like this already. If you are I congratulate you and would welcome your comments on how you do it. If you are not doing something like this on a weekly, monthly and annual basis, I encourage you to start doing it. Start with a documented annual financial plan. You may be surprised what will come out of this activity.
Now is a good time to start working on next yearâs plan. The monthly and weekly plans will flow naturally. The biggest benefit may be that you will be confident that your actions and the actions of your employees are focused on the best interests of your business.
Finally when you are faced with an important decision -- because youâre operating in the framework of your business plan -- youâll know what bus to take.
Editor's note: Chip Yawney discovered his passion for woodworking while renovating a historic building he owned with several partners. He founded A Cut Above LLC, Jessup, MD, in February of 2006.
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