6 Steps to Financial Freedom for Businesses – Step 2September 7, 2023
In the first part of this series, we discussed the most important step, the step that helps everyone pull the rope in the same direction — a prosperity mindset. Today we’ll glance at a few of the nuts and bolts of internal structure.
Every business in the world is made of the same critical parts. Every business needs answers to the following questions:
- How are the core tasks of our business being handled?
- Who will fill each role, and how do we find them?
- How can we get people to purchase our product or service?
- How will we keep track of our progress or failures?
Strategic Plan and Organizational Chart
Step 2 in the 6 Steps to Financial Freedom for Businesses is creating a strategic plan and an organizational chart for your business.
In other words, what’s the 1-year, 5-year, and 10-year plan? What are the executable steps to get there? Which steps take priority? What does the organizational chart look like now? And what will it need to look like in the 1, 5, and 10-year future versions of the company?
I was talking to a client recently who really wants to grow their business. They are doing about $1 million this year in revenue. But they want to go to $5 million. In order to help, I needed to know where they were, organizationally speaking. When you think of an org chart, the lines, the little squares, what does it look like in five years?
In order to take those measurable goals seriously, we have to plan measurable action steps, and we must begin planning now. Your name will be in a lot of those boxes in the org chart because you wear a lot of hats as a small business owner.
But the key is this — you have to identify every role that will eventually need to be filled.
As the business owner, you get to decide which role you want to keep, meaning which boxes you want to keep your name in. If you love Sales, maybe you continue to run Sales. If you love Operations, maybe you run Operations. But you’ve got to focus on what the company will look like at $5 million, $10 million, $50 million and decide which boxes you want to be in, if it realistically makes sense to occupy them. Remember, a $1 million company can look wildly different than a $50 million company. So the organizational chart is really, really important.
Next, we need to create the strategic plan. This is where we look closer at business details. There are four critical areas of your business:
- Operations: How are the core tasks of our business being handled? These are the daily nuts and bolts that make the machine run. If you’re a baker, then you’re fixated on mixing the dough and baking the cakes. If you’re a heating and air conditioning company, your main concern is going out and installing a new system or servicing an existing system. If you’re an insurance agent, maybe the tasks you perform most in the office are taking calls and writing policies. So the operations of your business are the meat and potatoes of what you do, right? You have to have a plan for how you do that.
- Sales and Marketing: How can we get people to purchase our product or service? Almost half the clients I speak with are struggling with sales and marketing. We recently had a coaching call with a real estate company. They had been living under the belief that in order to be the most successful company, they needed to fill their office with the most technical real estate agents. I had some bad news for them. The best real estate agent doesn’t win. The person who’s best at sales and marketing wins.
Being technically sound in your career is important. But I know plenty of people who are good at what they do, but no one has ever heard of them. This translates directly to them not being as successful as they could be. A lot of real estate agents tell me, “I just want to be known as #1 in Customer Service.” It can be quite the fool’s errand to market yourself exactly the same way as everyone else. It’s a bit like the saying, “If everyone is special, then no one is.”
We’ll do a deeper dive in the future into Marketing, but just keep in mind that you have competition that can overcome your best efforts by simply developing a good marketing strategy. It’s not enough to just work hard, you have to work smart too.
“If your business has a superior product or service, yet the competitor is kicking your ass, then it’s only because they are better at sales and marketing than you are. The best product or service does not win. The best marketer wins every single time.”
Marketing is there to help find prospects. Sales is there to convert those prospects. What is your strategic plan to generate leads and convert those leads into business? Trust me, it does not just happen on its own. At Christmastime, you may put out stockings and wake up the next morning to see that they’re filled. But for Operations and Sales and Marketing, you must have a plan.
- Human Resource Management: How are you going to hire and fire people? What’s the onboarding process? How are you going to train people? Our new hire Sales guys sit in front of a video monitor for two days. They watch the training I created because I recorded the whole process, and it’s proven effective at each stage. Long story short, it’s all part of the plan.
- Finance and Accounting: What is your strategic plan for your finance and accounting? Do you have a budget? You should have a projection at the beginning of each calendar year or financial year. How do you do this? You use historical data from your past performance to start with. Then you take what you know about your market and make projections or estimates for certain goals, like number of sales, revenue per lead, and so forth.
Then you break that down monthly. In my company, we even have weekly and daily projections. And using the numbers we projected, I know I’m right on budget for this year, and we are heading towards our goal of $10 million and are looking strong. We’ve factored in contingencies, and we make adjustments when needed.
How do my projections help me? If the numbers are trending low for a couple of days, I can start doing something about it. Most companies don’t even have a budget. This blows my mind. If you don’t have a budget, how do you know if you’re doing well, or if changes need to be made in training, personnel, pricing, procedures, etc.?
Like I mentioned, I’m just covering the tip of the iceberg here for this series. I cover every topic in great detail, personalized for your company, and I walk through the year with you to make sure you have all the bases covered and know what to do if circumstances call for pivoting.
Any guesses on Step 3? Check back here for the remainder of the series.