Business planning is very important – it’s like knowing the directions when you want to go somewhere and now is the perfect time to set your business plan for 2015.
A great way to make sure your business stays on track is the Now-Where-How process. This process asks three key questions that need to be answered in developing a plan:
1. Now – what is the current situation?
2. Where – what is the destination?
3. How – what needs to be done to get there?
The Now can be difficult for business owners to answer as it requires an honest assessment of the good and the bad within the business,encompassing:
• Financial performance trends
• Staffing issues
• System and process issues
• Customer and product profitability
• Market and wider economic factors.
Reviewing these internal and external factors allows business owners to ‘draw a line in the sand’ that can then be used as the base from which to measure future improvements. Assessing where you are Now can often lead to jumping in and fixing problems – or lead straight to the How part of the process. The problem this can cause is that you may just be fixing the easy things or the most visible. Ideally you want to be spending your energy on changing the systems or processes that are going to give you the greatest return in terms of increased profits or dollars spent. The Where part of the process will solve this.
Where is best seen as the strategic plan for your business. This is the plan that answers the questions of where are you going and why? The strategic plan should look three to five years out and cover:
• Core values that guide the business and the reason that it exists
• Vision – where do you want the business to be positioned?
• What capabilities are required to achieve the vision?
• What are the competitive advantages of the business
• How will success be measured?
Once you know the Where, then you can focus on the How. This is your business plan – the action plan that will take your current position to where you want to be. This is the exciting part of the process because it means action. This is when you get to pull the ‘levers’ of the business and see changing performance.
Now-Where-How analysis ensures that your business plan does not simply become an operational checklist , focusing on how you will run your business. It ensures that you are not stuck on an endless journey, without a destination. The continual use of this process is like referring to a road map. Always ask where is your business now, where do you want to get it to, and how will you do it.