Stop planning and go home

“If you do not know where you are going to, how will you know

when you have arrived?”

Planning is critical to any business. If we do not know what we want to achieve (profit) and what we need to do to achieve it (plans, strategy) we will not know that we have accomplished it (goals).

We do not merely get into a car and start driving. We need to have a plan and a goal. We might want to drive to Cape Town and arrive by a certain time (goal), therefore we need to depart at a certain time, taking into consideration the distance, the speed limit, and other things. We need to consider the fact that we need a roadworthy vehicle, we need to take a number of rests along the way as well as to fill up with fuel after every so many kilometres. Our expenses will include toll road fees, fuel and meals. By knowing our vehicle’s fuel consumption and the distance we need to travel, we can calculate fairly accurately how many litres of fuel we need, and therefore how much we are going to spend. This example illustrates a simple plan and thus a budget.

In our business, we also need to plan. What are our goals, what do we want to achieve and how much do we need to spend to achieve this?

Goals need to be challenging, but achievable, they must be linked to a time frame and must be measurable. Stating that our goal is to make a profit of R100 might be unacceptable. Firstly it might not be very challenging (to make R100) and secondly we have not stated a time limit (it is however measurable). It is therefore much better stating that we want to make a profit of R100 000 in six month’s time. In six month’s time we can now rate our performance, did we achieve our goal? If we have made a profit of R10 000, within the six-month period, we know that we have accomplished what we set out to do.

So, start planning, or go home.