Last month I was speaking with a landscape company owner about his game plan for 2021 and beyond. He explained that he had a great year in 2020 and had set time aside to work on his “Strategic Plan” for 2021 and beyond. When I asked what his plan was, he shared the following with me:
- Increase revenue by 20%
- Maintain gross profit margin of 50%
- Improve net income to achieve 20% every year
These sound good, right? Well…
First of all, these are what I would call the start of a set of performance goals for the next year. To be a strong set of goals these need to be more complete. You’ve heard about goals needing to be SMART –Specific, Measurable, Achievable, Relevant and Time Based. Each of those goals needs more detail. There are probably a few missing as well.
But the real story here is that these are not strategy. Real strategic planning involves another way of thinking. A lot of companies have Vision Statements and regularly prepare their Annual Financial and Operational Plans and related performance goals. But these are not strategy.
Strategic planning requires insight into the company, its environment and upcoming changes that could be transformative. Once the various issues are identified, the team will identify possible causes and actions that might be taken to best position the company going into the future. The future direction the company should lead to substantially higher performance. Before selecting which actions to be undertaken and how they interact, obstacles need to be anticipated and choices will need to be made about which path will deliver the best results.
Here are some recent examples of transformative changes in our industry. How might these change your business over the next few years?
- Robot mowers combined with global positioning software
- Comprehensive software to streamline estimating, pricing, scheduling on a real time basis
- The use of Zoom for virtual selling, project meetings with clients and teams versus travel
How have you positioned your company in relation to these opportunities? If you are doing business the same way you have done for the past 10 years, what is likely to happen to your company in the next 10 years?
Where are you in your process? If you’d like to discuss your situation, selling or buying a business or preparing your business for sale, please let us know. In the meantime, if you have questions or comments, I can be reached anytime via email: [email protected] or phone at: 224-688-8838. We’re here to help you harvest your potential.