Here we are at the end of another year. Have you achieved all you expected to achieve in your business? If not, it may be because you are planning on too short a scale.
Start the plan by blue-sky guessing. What is the best-case scenario you can come up with for 10 years down the road? If you start from today and build up to 10 years from now, you will still get a viable plan, but it will be a mousy plan based on conservative estimates and past performance.
If you think about it, a kid who decides to go to medical school and become a doctor is not working from past performance. She has never been a doctor before. The audacious plan of a high school sophomore to become a doctor is the same kind of plan you need for your business. Find a goal that makes you hum.
As an example, let's say you run an office-cleaning service and you are reasonably successful. For the sake of example, let's say you started the company in 2003 and the company made $250,000 in 2013. To achieve this, you have brought on two new customers every year on average.
The average customer makes you $1000 per month, so you have to keep bringing on a new customer every month to remain the same income level (not adjusting for inflation and cost increases).
To maintain that level of growth, you probably talk to 2 business owners per month. If you nave never figured out these metrics for your business, now is a good time to do it. Call it a New Year's resolution.
If you project a conservative 10% per year increase in gross, the company will be grossing $275K in 2014, and can expect to be grossing $713K by 2024. That is pretty good.
The problem with this model is that your own percentage of the pie will actually go down. By 2018, you will be totally unable to sustain the model, as you will run out of time. If you are a solo entrepreneur, you are pretty busy right now. You clean 5 offices every day – see each customer's office once a week, and since you added customer 21, you are working a little on the weekend. You basically own a job from which you can never take a day off without reducing the gross income. That probably wasn't your plan when you started the company, 10 years ago.
Now let's blue-sky the 10-year goals. If you can say that a team of three cleaning professionals can handle 21 customers, and not go into overtime. You kn ow this because that is the team you are working with daily to do the current work-load, and your current net after paying wages to the team and expenses is about $50K, which you keep for yourself. If you were paying somebody to do your job, they would be making about $30K, but because you are the boss and have all the risk, you make about $20K more. This gives us a more effective unit of growth than adding 2 customers per year.
Why would you want to do better than a 10% increase in gross every year? Maybe you want to put your kids through college, live in a nicer house, have more free time to spend how you want, support your charities better, actually go on vacations, support your elderly parents. You see, having a lot more money lets you help more people and have more free time. Perhaps in 10 years, you want to have a house that is big enough for the whole family to come home for the holidays.
If you work it out that you have to make about half a million a year to make that happen, then using the team unit as above, you have to have 25 teams working full-time. You will have about 500 clients and 75 employees.
To get there you need 240 customers by 2019, and you need to hire a team leader for your first team and start hiring a second team right now. You have to start marketing your services, so on Monday, call all of your customers and wish them a happy new year, and ask them if they know anybody else that might need needs their office cleaned. Get in the habit of talking to at least 10 people every month. If all of the 10 people you talk to sign up, you will have 120 new clients by the end of 2014, which puts you at 300% of plan from Illustration 2 and double the 10th year level from the 10% flat growth model. That is achieving 10 years growth in one year. This is a way to use the Law of Atttraction in a way that makes sense. One way to think about the Law of Attraction is that what you think about becomes more prevalent in your awareness. Thinking about talking to 10 potential clients per month in a systematic way is going to get you more than not thinking about getting more clients. This is not magic. This is systems thinking.
I wish a Happy and Prosperous New Year to you and yours.
Send a request to me through google+ and I will be happy to send you a copy of the spreadsheet with the blue-sky numbers laid out. http://www.examiner.com/business-development-in-atlanta/michael-wolf-halton