MA Business Success 34: Creating a Business Plan

https://soundcloud.com/tima-38/tima-podcasts-episode-34

Alex: Today we're talking about setting up a business plan for your organization. So Phil, first up, why's the business plan so important? Phil: Well, if you didn't have a plan or a map of where you wanted to go you wouldn't get anywhere. Alex: And that goes across the board with any business really, doesn't it? Phil: It goes across the board with starting a business, it goes across the board when you're traveling. Where you want to go, anywhere in life you've got to know where you're going, you have a plan. Because if something goes wrong, you gotta be able to know where to get back on track or we all get lost in the busy world, it's noisy out there and we get weighed down with all the goings on. So a plan is a way to get back on track. First thing you've got to do is, like always, and maybe I'm the king of quotes lately is, "Begin with the end in mind," Stephen Covey. Which we've all probably heard before as martial artists. But you really gotta create that clear vision. Get absolute clarity of like, what does it look like 10, 20, 30 years down the track? What do I want to leave behind, what's my legacy? Because it's only until then you can start working backwards. Now plans change, not an issue, you know, things happen. You might change direction completely or sell your business half way through, it doesn't matter. But without that clear direction, that clarity of where you want to be 20 years down the track, you can't really fully plan for the success that you want. Alex: Okay, so I've got a big idea of where I want to go with this business, but how do I start documenting that? What do I start with? Graham: Look Alex, it can be a bit of a challenging thing for people who are in business to think, "Okay, jeez look..." Initially you may have just gone, "I have a business plan, I don't have a school at all. I want to create one." That's a generic thing of, okay well, find the locations and then starting to do all that homework and research. But what about if you've already got an established business, you know? And building another business plan is, how do I want to start, where do I want to go? Do I want to go to multiple locations, do I want to grow this business? And I know myself, and Phil, each and every year, revisit our plan, and it's almost like revisiting those goals but as a serious sort of planning stage, it may be a two or a three year period, I know that we set some long term goals. But it's always a revisiting and thinking, "Okay, does it need to be changed, does it need to be supercharged?" And really it's getting, you know Phil pointed out so clearly that it's that clarity on, okay what's the very next step with this? Where are we heading, and then reverse engineering that. So then starting to think, well if that's the end goal, what are the steps that are going to help me get there? And then taking that very first step. Which, you know, it can be very different depending on the outcome you want. Alex: Okay, so start with the end in mind and then write down how you get there. Phil: Well, I think like, what it is, what we've always done and even, take our last school that we started. Okay, what does this premises look like, how many students can fill this room? Okay, so we've got 400 students that can fill this room comfortably, that's the goal, that's the vision for three years. So then how many instructors do we need to facilitate that without us having to be there? So that's three full-timers and a couple part-timers. So when we get there we should have that many, so what does that look like when I've got 200 students? How many staff do I have then? How long will that take? Do I need a receptionist? So start working backwards and go okay, well where am I now? I'm a solo business owner. I'm on my own, I'm about to put the sold sign on the premises. Okay, so between now and the first year, I need to be able to have X amount of students and I need to be thinking about an assistant instructor and a part-time receptionist. So that's my plan for the next 6 to 12 months, and that's what you're focused on. Although your vision is 400, three staff, it's actually big picture thinking, what does it look like in the next 12 months? What can I focus on in the next three months? So that's the thing with goal setting and plan setting, is what can I do today and tomorrow to get me closer to my big vision? Alex: I think having been involved in a business that started very small, myself. The most difficult period was that growth at the very beginning. Of do I take that leap of faith and employ that first person and hope and pray that it works? It's that, and once you've done that once, that kind of thing gives you the inspiration and the motivation and courage, I guess, to move forward with that. Phil: But without a plan, as I was saying, you might miss the mark. You know what I mean? Alex: Yes, you've got to know when to do that, haven't you? Phil: You might be six months late from getting that person or it might not be right at that time but I think that's the key, is sometimes you have to go backwards to go forwards and that means employing someone that might mean a little bit further back in the finances in the pocket, but think of the big picture. Well okay, I'm still trying to get to those five staff, or whatever it may be, to grow that big vision. So yes, begin with the end in mind. Know where you are today, and then break it all down into actionable steps, 3, 6, 12 month, 3 year goals and try and keep on that playing field, while revisiting them regularly with someone. I mean Graham and I do this regularly because we're business partners. But if you're on your own, who can you share your goals and your visions with so that you can keep accountable? A business coach, a mentor or whatever it may be. Alex: And also keeping in mind that if you're in the business 100% of the time, you're not going to be able to work on the business. So that, I mean another important part of that plan is to kind of extricate yourself from the doing so you can actually spend time on the. Graham: There's another part to obviously dreaming big and being that business owner. We've got to remember that there are some skilled martial artists that are probably listening to this and people who are savvy in different aspects of business but we can't always cover everything, but finances and understanding finances, you know a business plan is really important. Because having a dream to have five staff, well, what is it going to cost me? And what do I need to get there, to make that happen? How many students do I need? And what if I increase my student fees by $5, would that get me there sooner? So it really gives you an understanding to go, I need 100 students but what if 100 students only pays me $50 per student? What if they pay me $60. Will I get there sooner? What if they pay me $70? So that gives you an understanding of how to gauge your market, who you're targeting. There's so many factors in there, if you know your numbers, it helps you to plan and make a really quite a clear, concise decision on timeframes that you might be able to accomplish this, which is really great. Alex: Yeah, absolutely, so you've got to have these milestones, you've got to keep reviewing where you are at every stage, haven't you really? Phil: Yeah, absolutely. I just got off a phone call with one of our coaching clients and he's kicking off, he's got about 50 members at the moment and he's got a full-time career, him and his wife, but he's doing his martial arts on the side. Wanting to go full-time and something that stands out in what we're talking about with his plan is that, look, he knows where he wants to be and he knows he doesn't want to wait five years, like everyone else does. So he wants to shortcut it. So what is he doing? He's employing Graham and myself to give us our experience of the failing and the succeeding and, "What are you doing here? What are you doing there? Can I borrow that? What's your advice on this?" So he can shortcut, so rather than take three years, maybe he can do it in one and a half, while still keeping his income and different strategies. So it's important within your business plan, is to find, you know, if you want to be successful at something, find someone who's doing it well and ask them how they're doing it. Because the chances are you'll greatly increase your chances of success and shorten the amount of time as well. I don't know anybody who's been successful in business who hasn't had a mentor or coach. Look at any professional athlete, how did they get there? They need a coach. So if you want to be good at something, find someone who's going to keep you accountable and push you to past that comfort zone. Alex: Yeah, absolutely. So I guess along the way you've started with the end in mind, you've then built up those little milestones, you're then constantly reviewing. I mean, that business plan is forever going to be growing, evolving. Graham: As I pointed out Alex, it's a very fluid document, if that's the right way of putting it. But setting yourself a two year phase to go, look let's have a really good look at what's next. Has the business grown to that point where I'm now looking to employ more people? Okay, that may be in that original business plan. Maybe now, jeez, we want another location, goodness, or I want to take a little bit more time off. Whatever that may be, but you do need to kind of have those checkpoints set out. I don't think you'll ever just complete one, shelve it and then just create another one. I think, like anything, it evolves. You may have had...I know myself and Phil, looking back at our Wayma [SP] our business plan idea from day one, to where it is now. It's very different, but it wasn't very different each and every time we reviewed it, it was just a slight tweak, a slight evolution. But then when you finally look back you think, "Wow, we're miles away from it." So I see the document as being refined as you go at every step and milestone, but hey, dream big and obviously take the steps to get you there. Alex: And also, look at what other people are doing, keep up to date with what else is happening within your industry. I mean, there are so many different things that could impact your business that you have to be aware of all the time, and obviously all those are going to be...are going to come to the sort of evolution of your business and the changing of your business plan as you go along. Phil: There's probably, doesn't matter what business you're in, there's probably two things, probably three, but two main things that any business needs to do to be successful. Do you want to know them? Alex: Come on! Come on! Phil: First thing is, you need to be able to market yourself. You need to be marketing yourself all the time, how else are you going to get people knocking down your door? So you've got to be thinking of different ways to market yourself to get the phone ringing, get people knocking the door, walking through your premises, non-stop. So every business, it doesn't matter what business you're in, you've got to market yourself. The second thing you have to do, which is probably the most important thing, is innovate. And we've spoken about it before, but if you're not ahead of the game, if you're not continually trying to improve yourself, your service, your product, then people are going to get bored of it. So your current clients will get bored, and even people who aren't your clients or wanting to be clients will just see other people who are doing better things than what you are. So if you're consistently marketing yourself and innovating your products and service, you're going to be head and shoulders above everyone else. And the third little thing was, everyone needs accounting, that's that "financy" thing, numbers thing over there, no one really likes doing. It's really the engine room of your business. Alex: Yes, absolutely. Phil: If there's three things that martial arts schools or businesses in general do, it's continually marketing yourself, and trying to figure out new ways to market and innovating that as well. But innovate your product and service, how can you deliver it bigger and better each and every year? Alex: It's like being the Madonna of the martial arts field. Phil: Always be evolving. Alex: That's right. Okay, we'll leave it there, thanks very much indeed, lads. Phil: Thank you. Graham: No worries.