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November 29, 2017 | Posted in:

The Hourglass Solution: A Simple Approach to Business Planning

Annual business planning shouldn’t be overly difficult. Since business owners often spend too much time with day-to-day operations, they may keep putting off their business plan. Consider the hourglass approach as a simple technique that help you focus directly on your goals and follow a structured plan to make progress towards them.

 

See: The Importance of Business Planning →

 

Hourglass Business Planning: Top of the Glass

In the first stage, review the internal and external business environment, similar to a shortcut SWOT analysis (strengths, weaknesses, opportunities, threats). Force yourself to carefully consider the current variables affecting your business:

  • Internal environment. Look at all aspects of your business, from personnel to financing. Review your sales and marketing as well as operations. Identify your strengths and weaknesses as well as the critical success factors for each aspect of your company.
  • External review. Now conduct the same review of the business environment. Review your competition. Review your current marketplace. Look specifically for trends, both good and bad. Conduct a similar review of the legal and regulatory environment.

 

Hourglass Business Planning: The Narrowing Middle

Now you should have a good handle on the present-day situation of your organization. Use this information to create the middle of the glass and distill it into actionable priorities.

  • Short lists of actionable focus. Create a short list of three to five strengths and weaknesses. Create a similar short list of your biggest problems and opportunities. These lists will be your focus as you set your goals for the next year.
  • Create goals. Your goals should be well defined and measurable.
    – Financial goals: sales, gross margin or net income targets
    – Volumetric goals: number of customers, orders or other key measures
    – Learning goals: lessons from product launches, competitive intelligence
    – Operational goals: projects to address weaknesses or leverage strengths

 

Hourglass Business Planning: The End Results

In the bottom stage, you need to create your plan with a specific road map to reach your goals, such as:

  • Create your annual financial plan.
  • Identify resources you need to achieve your goals.
  • Prioritize projects and create to-do lists.
  • Create basic timelines.

 

Additional Resources on Preparing a Business Plan →

 

Consider trying the Hourglass approach to create your next business plan. It could help you and your team move your business in the right direction. Of course you can turn to your Alloy Silverstein accountant and advisor for a partner in creating your business plan and to make sure you are following through on your objectives throughout the year. Contact us today.

 

Author:

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