5 Crucial Mistakes Made When Business Planning (And What You Can Do About Them)

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At Your Performance People this is our busiest time of year. We are working hard with entrepreneurs and teams to help them review their year and plan for the next one. We love this time of year because we get to look at all of our work, identify the successes of last year, begin to predict market changes, and continue to build on the foundation we’ve built. Although it’s a fun time of year, it is also one of the most difficult. As coaches, we continually see entrepreneurs build out an elaborate plan, and by March they can’t remember where they put it. Everyone agrees that business planning is an essential part of building a business, and yet very few people do it effectively. After years of experience coaching and working with business people at all levels, we’ve realized there are 5 critical mistakes that will stop you from having an effective business plan.

  1. The Goal is not Believable

Having a clearly defined goal is an integral part of your business plan. This is where it all begins. We often ask people, what caused you to pick that goal? Interestingly enough, many people have trouble answering this question. We see that sometimes people just want to double their business or have a 40% increase because they think it sounds good. Many times, they haven’t spent time really thinking about what the goal means or what it will take. They haven’t considered whether their goal is something they truly believe in or not, and this is a foundational piece of your business plan.

If you don’t believe you can hit your goal, you won’t. This goes beyond just the leader, if the team doesn’t believe the goal is achievable, they will not work towards it. When was the last time you played a game you thought you would lose? How much effort did you put into winning? It’s more effective to set a goal you truly believe in, than to set a huge goal you don’t think is in the realm of possibility. One of the keys to unlocking higher performance is the perceived challenge level. When something seems too challenging, we shut down. Putting ourselves in a position where a goal’s attainment is too difficult to believe or seems impossible to us, often creates so much pressure that we give up. On the other hand, when something is too easy, we don’t try very hard; we underestimate it and don’t put our best foot forward. As you think about your goal, ask yourself:

What is the challenge level?

Do I believe this is something I can accomplish?

Does this excite me, bore me, or is it overwhelming to think about?

Ideally, you want the challenge level of your goal to be one or two notches above your current ability. Set it at a challenge level that excites you and requires you to grow to achieve it. If you don’t have a goal right now that is believable, then change it. Sometimes this can be as simple as changing the wording, changing the metric you are focused on, or changing the time frame. If you are leading a team, be sure you check in with all of your team members to find out how challenging they find the goal. We want the challenge level to excite and inspire, not bore or overwhelm.

  1. We Underestimate the Amount of Work the Goal Will Require

We see goals fail repeatedly, because people fail to anticipate what it takes to achieve the new goal. Many times, we see entrepreneurs who think, “I just have to do what I did last year a little bit harder,” or, “I have to talk to more people, work more hours, and that should do it.” This thinking is ineffective because it does not get specific enough about the change required and, in many cases, it focuses more on the work harder vs. work smarter mindset. To be effective here, it is important to identify the change required to take you to the next level, both strategically and behaviorally. Here are some common questions we work through with individuals and teams to prepare for the behavior shift that will be required:

What current habits will you (your team) need to stop in order to hit this goal?

What new habits will you (your team) need to adopt to hit this goal?

How will you demonstrate your commitment to these new habits?

How will we hold ourselves (each other) accountable to these changes?

By asking these questions directly, you start the process of identifying what change will be required. Any new goal requires an incredible amount of energy and focus, and the habits identified here become a constant conversation.

  1. Having Too Many Areas of Focus

Once your goal is defined, decide which areas you will focus your energy to achieve it. You’ve probably heard of the law of diminishing returns. This law states the more things you attempt to accomplish, the less you actually do. What this means is, if we have too many areas of focus, we will accomplish less than if we just had 2 or 3 areas. With that in mind, consider that you only need 2-3 areas of strong focus to achieve your goals. Given the importance of having a strong area of focus, what are the main areas you will focus on to achieve your goal? Here are some questions to help you narrow down your focus:

What is one area of my business that if it was completely transformed, would allow me to hit my goal?

Create a list of every idea that comes to mind, then narrow it down to 2-3 areas

After you’ve narrowed your list, ask yourself- Are each of these areas absolutely necessary to achieve my goal? If not, it does not need to be there. Focus on what is necessary and will have the greatest impact.

  1. Strategy is Unclear

Remember, clarity and specificity is key in creating a great plan. Now that you have your areas, it is time to get specific and dig into strategies or action items. Consider that when strategies aren’t well defined or are too broad, they don’t get executed to a level that would create real change. In each area of focus, come up with 3-5 strategies that allow you to achieve your goal. A great question to ask yourself here is:

What could I do in this one area that when accomplished, would allow me to achieve my goal?

Once again, write down every idea that you have and then narrow down your best choices. Your best choices can be identified by asking yourself how difficult they are to implement and how high of an impact they will have. We want to focus on our high impact and easy implementation items first.

  1. There Are No Metrics for Success and No Structure for Accountability

By now, you’re beginning to see you have a pretty solid business plan, and yet, there is one final trap we can fall into at this point. Once the year starts, it’s easy to get in the weeds and focus so much on executing that we lose sight of the bigger picture. When this occurs, most business plans seem to go out the window, and it happens because we haven’t defined our metrics for success, and don’t have a structure for accountability. This is the most crucial piece to a successful business plan. Without this, your plan typically has a lifespan of 30 days.

The reality is, your plan has numerous areas, considerations, and priorities which require energy and attention. Understandably, this can be a lot given the potential change that is required. Do you remember what I said at the beginning? When our goal seems unbelievable or overwhelming, we shut down. No one wants to look at a plan that seems daunting! A year long plan can seem incredibly intimidating. How do we combat this? We get focused and we get specific:

Identify your lead and lag measures. Your lead measures (usually in the form of actions) are the things you can influence everyday that will lead to the result (your lag measure). Get focused on executing your lead measures every day. These measures function much the way GPS works to guide you to your destination, by providing the route, turns and exits necessary to reach the destination you entered.  In this case, your goal in your business plan is the destination, and the lead and lag measures along the way are the routes and turns that the GPS uses to guide you to your destination which is your goal. Use the questions below to identify your daily and weekly metrics for success.

What is a successful day for you (your team)?

What is a successful week for you (your team)?

  • For each area and each strategy: Identify the person on the team who will own it or who will execute it
  • Spend time each day checking in with where you are in relationship to your goal
  • What happens when we get off goal? Make a plan ahead of time and agree on what each person will do when this happens to allow you to get back on track.

You already know, even the best and most well-researched business plan, cannot fully anticipate what the future holds. Your strategies are under constant evaluation as you execute your plan. This is where tracking the Lead & Lag metrics you established pays off, since they provide valuable feedback to illustrate whether you’re on track for your goal. By identifying and tracking your lead measures, you will see whether they are giving you the result you intended or not. If you are off track, these lead measures will provide you valuable information and provide you options to consider and execute to get you on track for your goal. Naturally, you now can see, your ability to hit your goal simply comes down to your ability to execute your lead measures, track results, notice changes, and adapt when necessary. When you build that into your plan, you undoubtedly will have a great year!