A key difference between successful business owners and less successful ones is the successful ones are aware of what is most important and are able to stay focused on that. This one page business plan is a great place to end up to help you get and stay focused.
There are two reasons why this is very important: Occam's Razor and the Law of Focus.
- Occam was right when he first articulated hundreds of years ago what has since become known as “Occam's Razor": The simplest explanation is likely the best. Said another way, if you can't explain something simply, you probably don't know what you are talking about.
- The Law of Focus says we can only do a few things well and in any given situation only a few things matter. That is great news for us as business owners and managers and yet a reality we sometimes lose site of.
We call this one page business plan your VOLT(tm). This stands for Vision, Objectives, Levers, and Targets. By breaking up how you think about your business into these four areas you can help ensure you are staying focused to your vision, know if you are on track, have clear direction on what actions you need to take during the year, and know if those actions are working. Specifically, these are:
- The guiding Vision you have for your business
- Your business Objectives for this year and several years out
- The most important Levers you are going to focus on to run and grow your business
- Your easily measurable Targets for each of those levers to help you know if you are on track
If you haven't developed a clear vision statement for your business I highly recommend you do so and while that is beyond the scope of this article, for examples sake, your vision should follow along these lines:
- Generally one to two sentences maximum. It needs to be guiding and focused.
- Big picture focused. You are going to be #1 or #2 in what category for what target?
A Vision is great but you need to be able to track how you are doing toward that vision. A good Objectives section will have important measures for at least three time periods. The first is last year's actuals (if applicable) so you know your baseline. The second is this year's target so you know what you are going after. The third is a time period three or five years out. You want something to keep this year's goals in context and help ensure you are not too focused on the near-term. That said, too far out and it becomes interesting but largely meaningless.
The measurable objectives themselves will be directly related to what you have in your Vision statement. If you are going to be number one in your category how will you measure that? Will it be customers, profit, revenue, client satisfaction, a combination of two or more of those? Usually there will be at least two and more likely three but not more than five. Think big picture here.
What are the important levers you are going to pull in your business? Usually there are less than five. Examples include:
- Enhance new client acquisition by. . .
- Generate referrals by. . .
- Increase revenue per client by. . .
- Enhance existing client retention by. . .
- Introduce/upgrade/expand product line by. . .
- Reduce costs by by. . .
- Form strategic partnerships/joint ventures with. . .
Make sure your levers pass the sufficiency litmus test: “If I pull these levers will they be sufficient to reach my business objectives?"
One additional level of detail many business will do is list out 1-2 key tasks, programs, or tactics which they plan to do to pull each lever. This helps them get more focused in what they will need to do. At the same time, many business leaders will assign a specific owner to each task or even an overall owner for a specific lever. This help them be clear on who owns what and helps them both keep everyone focused and on track (whether they are employees, consultant, contractors, or vendors) and help the business leader work on their business rather than get sucked into working too much in their business.
Each of your levers should have an associated and measurable Target. Depending on your situation and the levers you have chosen the targets can be just for this coming year or you can also show them for the prior and a future year as well for perspective. Setting both overall Objectives and these lower-level Targets are important to help you understand if you are achieving your overall Vision and what levers are working and not working in your effort to do so.
Once you have boiled down the key decisions and actions to this focused one page plan you will likely quickly be able to determine if you have have the plan you need to succeed. Going through this process can be a great way to find out what you don't really know, what is missing, and if you are being focused enough.
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