Do more than hope for better sales, profits: The Whiteboard
Businesses running on a calendar year are just coming out of the starting gate.
Those running on a July to June fiscal year are just starting the second half. Either way, like a pre-flight checklist, there are important questions to answer now.
If your year is just beginning, you have a new budget and new goals, perhaps a new or updated strategic plan. Now is the time to confirm your readiness to achieve your goals and, if there are issues, to deal with them swiftly.
Is there really a plan in place to achieve budgeted sales and income? When I work with clients I frequently find that there is not a plan. The budget shows sales growing, but no one seems to know how that is going to happen. It’s like magic. It’s all pixie dust.
Sales might go up if the economy is growing, but that isn’t a plan, it’s a hope. A plan is a set of concrete actions we can take that we believe will increase sales. That might include new products and services, new territory, new accounts or a combination. It might involve a new pricing strategy.
If all you have is a bigger number in the budget so that it looks like you can cover your increasing costs, I suggest you do some serious planning and do it quickly. Your team needs a plan and marching orders. Shouting “Sell! Sell! Sell!” is not leadership. It’s cheerleading.
Similarly, if profits are going up in the budget it is pretty important for everyone to understand how that is supposed to happen. That again might be a result of price increases or it could be cost reductions. Which is it, or what proportion of each? If cost reductions are in the budget, how do we plan to achieve them? Who has the ball?
For either sales or profitability improvement, there is another question to be answered. Do we need to spend money to carry out the plan and is the money provided in the budget? If you are rolling your eyes, thinking that is a silly question, don’t. You’d be surprised how often the answer is, “Oops.”
Similar questions can be asked about strategic initiatives. Do we have a real, actionable plan to carry out the initiatives? Do we have the resources we need? If not, how do we get them?
If you think these questions should have been asked before, you are right. But things get missed, especially when everyone is hustling along into the holidays. Now is the time for a final check.
Business leaders at the halfway point of the fiscal year should take a serious look at results to date versus the budget and strategic plan, and plan necessary course corrections. Here the questions are a bit different.
If we are tracking behind budget, why is that? Can we make up lost ground between now and the end of June? If so, how, and if not, do we need to think about cutting expenses quickly? The status of strategic initiatives should be questioned. Are the projects on track? Is the strategy working? If it isn’t working, why isn’t it? Do we need to try a different strategic alternative?
This time, right after the holidays, is the time to make sure the year is well-planned and you are ready for a great start, or to make a good halfway check and, if needed, make critical adjustments. It is also the time, even when everything is perfectly planned, to make sure everyone in the organization knows their individual and departmental roles in achieving success.