Any successful business needs a good business plan roadmap.
That roadmap is essentially a written description of your goals and the steps you will take to reach those goals.
Shawn Terrel, CAI, AARE, recommends developing a five-year plan with measurable elements each year. Terrel is President of United Country Auction Services, where he oversees the management and operations of the largest integrated real estate and auction company in the United States. He is also Lead Auctioneer and a Broker for United Country in Kansas City, Missouri.
“A good business plan will answer two questions,” Terrel said. “Where do you want to go? And how do you want to get there?”
Developing a plan need not be time-consuming or cumbersome. Even a hand-written plan on a piece of legal paper will suffice, Terrel said. “You just need something to hold you accountable,” he added.
Business plan: Creation process
To create the plan, business owners should develop a mission statement, or a summary of the organization’s purpose, values, and goals. Ask yourself: How would the world or my community differ if my company did not exist?
“Define your purpose and your vision. Be true to your guiding principles,” Terrel said. “Look into your heart and think about why you got into the auction business.”
Next, a vision statement should provide strategic direction and outline what you want to achieve in the next five years.
Remember to be flexible because change is inevitable. In the past 10 years, technology has changed. Client expectations have changed. The real estate market has changed. To reach your goals, you might have to change.
“Your business cannot stay sedentary because clients are more demanding than they ever have been,” Terrel said. “Change is difficult for a lot of people. When you start to change or modify your business, it can make people very uncomfortable.”
Changing tactics is relatively simple, according to Terrel. A change of strategy, however, should be taken more seriously. A strategy involves what products or services you offer, and what markets you offer those products and services change.
“Every company has its own DNA. It is typically not a good idea to follow others’ strategies just because something they are doing looks good.”
To outline your goals, Terrel recommends using a two-by-two grid with the personal and professional goals on one side, and financial and non-financial goals on the other.
Examples of personal, non-financial goals are to spend more time with family or become involved in a cause that is important to you. A personal financial goal could be to get out of debt or purchase a home.
A professional, non-financial goal could be to build a proprietary technology, transition the company to a paperless system or become known as a subject matter expert. A professional financial goal could include purchasing more franchises or owning rather than renting a storefront.
Once you have written goals, Terrel said, develop ways to measure them each year.
“Business planning starts with the endgame. Look down the road five years,” he said. “Then reel it back and look at each year.”
Next, create a priority grid with five business elements: marketing, sales, operations, technology and training. Prioritizing strategic and tactical initiatives will help you reach your goals.
When developing the plan, it is important to remember to be honest about where you are and where you want to be.
“A good business plan will draw emotions out of you. You are thinking about what you have accomplished so far in life and what you want to do with the balance of your life,” Terrel said. “I want to be here in five years. This is how I am going to get here. Be very open and honest.”