5 reasons why your small business should establish a quarterly plan
Let’s face it, running a small business is an inherently chaotic undertaking. Virtually every small business owner realizes the virtue of consistent, structured planning, but it’s staggeringly hard to make inroads into specifics when you’re putting out fires across all fronts. Establishing a quarterly plan could be the furthest thing from your mind.
Though the idea of an enterprise-style quarterly plan might seem outlandish in the context of many small firms, it’s actually an idea with a lot going for it. Far from being a horribly corporate artificial construct with huge amounts of overhead, it’s actually an eminently sensible approach that can easily be tailored to the demands of small-scale entrepreneurship.
In this piece, we’ll lay out five solid reasons why it’s time to start thinking in quarters. Stick with us until the end, and you’ll be well on the way toward productively slicing up your year!
1. It shows you’re over the initial hump.
The time to start thinking about quarterly planning for your business is probably not straight out of the gate. In the very early stages, you’ll be lucky to have a clear idea of what’s happening next week, let alone next month or quarter.
Power past the initial storms, however, and you’ll hit a stage where you actually have time to breathe and start thinking about the future in structured terms. This is the magic point at which a quarterly plan really starts to make sense.
Even considering quarterly planning sends a powerful message to you, your staff and your customers — it means you’re over the initial hump of survival and are now actually running a “true” business.
2. It gives automatic structure to your year.
Every business is different when it comes to its own ebbs and flows. Particularly in the early stages of a new enterprise, it’s tricky to pull back and get an overall sense of what’s going on throughout the year rather than at any given time.
It also allows for a natural internal cadence to emerge within them. Rather than looking at the calendar as one long grind toward the end of December, you’ll have a series of defined stages to orientate yourself and your team around.
3. It gives you realistic planning windows (with time to react).
There’s something almost magical about a three-month window of time. It’s long enough to scope out even intricate projects in depth and short enough to start getting real feedback about what’s working and what isn’t.
From the point of view of an early stage business, completely concrete plans are probably best viewed a maximum of two quarters ahead.
That’s not to say you shouldn’t pencil things in for Q4 at the start of the year, of course. It simply means that you need to know it’s a provisional aim from the outset. The beauty of a quarterly planning approach is that it enables you to get hyper-specific about manageable time periods, and then gives you a natural window in which to reflect and readjust at the end.
4. It makes managing people substantially simpler.
A similar general point to the one above comes when we consider dealing with staff. Managing people effectively is a notoriously common weak point for small business owners. There’s an unfortunate tendency toward either inappropriate micro-managing or utopian, blue-sky posturing.
A quarterly plan gives everyone a clear set of stages to orientate themselves around, and it makes it substantially simpler for you as a boss to set crystal-clear, short-term goals and expectations in a sensible wider context. As mentioned above, it also gives you a natural set of points throughout the year when you can check in with staff and review what is (and isn’t) going according to plan.
5. It gives you clear reference points going forward.
Our final point shows its true value as your business grows over time. By committing to a quarterly planning method early, you get an invaluable set of clear reference points to inform your future decisions.
Clear quarterly planning (and results tracking, of course!) gives you concrete historical numbers that you can use for everything from seasonal trend tracking to year-on-year analysis of margins and key metrics. It also, crucially, provides you with a set of easily understandable figures that will make sense to other entrepreneurs should you ever wish to sell or seek outside investment.
Start your quarterly plan
Quarterly planning can seem daunting when you’re a small team, but really it’s just a sensible way of introducing structure and making sure you’re not biting off more than you chew throughout the year.
Let’s step through our five main benefits to close things out:
- It shows you’ve survived the takeoff period and are now running a viable business.
- It adds instant structure to your year and helps you get into an organized rhythm.
- Three-month periods are a perfect amount of time to plan, execute, and review even the most complex of projects.
- It makes managing your team and their contribution to the business much more straightforward.
- It gives you concrete historical numbers to use in future planning.
Have you already taken the plunge with a quarterly plan, or are you still dipping your toes in the water? Get in touch via the comments below and let us know!
Image by: eblaser via VisualHunt / CC BY