6 Reasons Why CEO's and Senior Managers Need to Refer to Their Business Plan Weekly !!!Greetings!
Running your business is a big responsibility. As the company's thought leader, you set the company direction and you are responsible for producing positive business results. You have employees, suppliers, customers and other stakeholders that rely upon your ability to ensure that your firm meets business performance expectations.
Your business requires a well conceived business plan that documents in both broad strokes and in detail, the strategy, tactics, and execution plan that you and your team will implement to achieve company business objectives. It is your firm's roadmap of how you will take company from point A to B. Your business plan should be given to every manager and brought to every management meeting as a reinforcement tool and a measurement tool of how your team is performing against the plan. Your team's progress should be checked against the plan at frequent intervals.
As the leader of the management team, or as a senior manager, you should allow for tweaks to your plan and be able to make adjustments to market, business, technology and political forces.
Every manager in your firm should be required to have a department or division plan. These plans need to reflect how each department or division will positively impact the company's overall performance and how it contributes to and enhances overall corporate objectives. Here are 6 reasons why quoting your business plan weekly are important to your firm's success.
# 1 IT IS YOUR FIRM'S LEADERSHIP DOCUMENT
Your business plan reflects your company's market, product, vision, strategy, tactics and financial objectives. These are the objectives set out by management. The business plan is the roadmap that sets out both high level and day to day actions that your firm will take in pursuit of company performance objectives. It is your corporate bible. It is the physical reference point and provides commonality of purpose across all divisions, departments and stakeholder entities.
#2 IT PROVIDES DIRECTION FOR ALL DEPARTMENTS
The business plan should be a document that is embraced by your entire management team. They need to understand it conceptually and concretely. Decisions should be made that reinforce company strategy and philosophy. When decisions are made that deviate, managers should be held accountable and be made to justify those deviations. Your management team should bring their copy of the business plan to their meetings so that their subordinates decisions and actions can be measured against the plan. Remember is it is your corporate bible.
#3 VENTURE CAPITAL FUNDING
Today's economic climate has taken a sobering toll on the way venture capital companies view their portfolio companies. VC's now require well developed business plans and they set distinct milestones that must be achieved to ensure on going investment. Venture capital firms are also looking to turn their investments over in shorter time frames requiring early and sustainable financial performance. Managing to your business plan and keeping it visible reinforces the company's objectives and milestones.
#4 IT IS YOUR FIRM'S MOST VITAL METRIC TOOL
Your business plan provides the yardstick for corporate performance. You plan sets the goals and objectives by which any analysis of success or failure can be conducted. It is the tool that the financial community uses to base credit and financing decisions which are often critical to your firm's success. If your management team isn't measuring their success for their departments, and you are not measuring your management team's success against your plan, you are both failing to follow your plan.
#5 COMPANY VALUATION
When you regularly refer to your business plan, you overtly reinforce its visibility and its importance. Your plan serves as a reminder that your company has structure and purpose. When your firm performs to plan, it enhances and reinforces the perception that your company will achieve its financial and business objectives. If your firm requires credit, or if your firm has an exit strategy that includes absorption, acquisition or succession, performance against plan will have an impact upon the valuation of your company.
#6 YOUR 1, 3, and 5 YEAR PLAN
Constant reference to your business plan provides continual visibility to your firm's performance milestones. Those milestones may be revenue targets, profitability goals, product development objectives, new market entry and penetration, market share growth, growth by acquisition, succession planning or acquisition by another company. Let me provide a note of caution here for tightly held companies where a CEO is the sole or majority investor. Exit strategy plans are often not shared with managers and your judgment must be exercised here.
Managing and leading your business is a premeditated process. A viable, working business plan that is visible, meaningful and functional goes a long way to ensure your business objectives. When you keep your business plan out front, you are declaring your plans value and importance. You demonstrate leadership with purpose and premeditation.
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