Today I am inviting Caroline from Number78 and Business Fusion to guest post!
We all know that we live in a high paced, totally accessible world. Although we’re all getting more aware of how dangerous it is for our health to go hell for leather for too long, those who choose to swim against the tide and lead a slower, more reflective life, often making a financial sacrifice to do so, are in the minority.
However you chose to live your life, money makes the world go round and if you’re a smaller business, making money is the difference between you being a ‘business’ or you having a very expensive hobby. Forward planning in small business seems to be the equivalent of those people who get off life’s hamster wheel – it’s done in the minority and is viewed as being financially sacrificial. Talk to any business that does it well and you’ll hear that it’s exactly the opposite.
Most businesses that we come across, work on a just in time basis – trading day to day, reacting to situations & opportunities as they arise, reacting to issues & problems as they arise, spending money randomly & looking ahead maybe a couple of months at most. Being busy & day to day delivery is perceived as productive and productivity equals money. The suggestion that taking time out of your business to plan further ahead is vital is often met with a wide eyed, eyebrows raised “I’m way too busy.” Add that reaction to a smart phone culture, where the world and time is reduced to the size of a pain au chocolat and strategic planning is quickly & repeatedly ditched.
The just in time title makes reference to a retail term whereby only just enough stock is held to sustain sales, it sounds reactive but ironically is anything but. To get ‘just in time’ right you’ve got to know your business & customers inside out and that doesn’t happen without planning. ‘ Just in time’ is a strategy to prevent tying up money in unnecessary stock that may not sell and take pressure off your cash flow – brilliant if you get it right but get it wrong and sales plummet and you face out of stock situations – the very opposite of making money!
So what’s the common denominator between ‘Just in time’ retailing utopia & the ‘just in time’ reactive culture that smaller businesses (and more than a handful of bigger ones) inhabit? PLANNING.
Businesses need to break out of the, we’ll do it, pay it, think about it, react to it, ‘just in time’ because the problem with ‘just in time’ is that it’s only a hairs breath away from ‘too late’, when the world becomes really stressful and problems keep you awake at night. Strategic planning should be as prominent in your business head as your end of year finances, as regular as your birthday and as engaging as your favourite hobby. Great planning is not eyes down on a phone, existing day to day, it’s eyes up & out, looking at your whole year……sometimes 3 years…occasionally 5. Looking ahead 5 years scares the pants off most people, as does 1 year in many cases but it’s essential to growth. Planning your year will naturally make you assess when you’re spending money & what level of business you need to be delivering, to generate the money you need – automatically you become adept at budgeting. Looking at a whole year teaches you what the trading trends are – the byproduct of which is better time management & efficiency. Looking ahead is the very essence of being strategic because when you look ahead and plan a year or more it becomes blatantly obvious that you have to prioritise and pace activity. Strategy is as much about what you’re NOT doing as what you are.
So whilst flying by the seat of your pants may work for Superman, it generally doesn’t do sustainable business growth any good at all.
So book some time out of your business and take action.