When you started your company, you probably had a dream of where you wanted the business to go and what the business would become over the next few years. Nothing is different today. Owners still have a vision of what they want the business to become. But most owners have stopped pursuing their dreams and settle for what they're used to with customers, competition, people, margins and opportunities.
After several years building their companies, most owners eventually reach the level I call the "uncomfortable zone"—a period in which they are uncomfortable and reach maximum levels of pain, stress, energy and effort. They begin to realize they have fallen short of their vision of an organized business that makes money and gives them exactly what they want in terms of time, satisfaction, finances and freedom.
As a business coach, I regularly receive calls from frustrated business owners who have reached their limits and need help. The typical question is: "What do I need to do to change my business and get it to work the way it should?" The typical scenario is a business with no written plan, no handle on the numbers, no accountable managers and not enough money for their efforts.
To build a better business, you need to first decide what you want to accomplish over the next 5 years. You are not in business to work hard and struggle, only to be frustrated and not make enough profit for the risks you take. You are in business to earn a good return on your investment of time, energy and money. As the owner, you must have a vision of what the business will become and the return it will generate with good people, systems, production and customers. Only then can you draft a written plan to go out and see the vision become a reality.
Decide Where You Want To Go
When business owners call for help, I ask them to email me their business plan, and I normally receive a blank sheet of paper. Without a written vision and detailed plan, how can you ever expect to get where you want to go? The first step of drafting your blueprint is to decide where you want your business to go in the next 5 years. What's your vision for owning a perfect company? Identify how you will do business, the perfect size of your company, the type of customers, where you'll do business, the number of employees, how you'll generate revenue, what your company will be known for, how much money you want to generate, the assets you want to acquire and what your role as owner will be.
Draft Your 5-year Vision
Start by completing the 5-Year Vision Worksheet on page 11. If you want to make $1 million per year in net income or have a net worth of $10 million in 5 years, write it down. Perhaps you want to be the leading specialty construction company in your market, or have 10 loyal customers who give you all their work. Maybe you want your company to be run by a general manager who handles the day-to-day operations, allowing you to work on your investment portfolio 3 days a week. Or perhaps you love working with customers and want to continue to be the chief salesperson and have someone else run your construction and field operations. Below is an example of a 5-year vision plan, complete with targets and timeframes. How does your plan compare?
- Grow 15 percent per year with 6 percent minimum net profit and $1 million working capital
- Accountable, organized and systemized management-team-run company
- Project types—Office, industrial, manufacturing and warehouse buildings
- Project size—$6 million
- Contract types—Negotiate 80 percent of contracts
- Sales plan—Maintain a bid-hit ratio of 33 percent or better
- Expertise—Difficult projects requiring high performance evaluations and strict qualification standards
- Employees—Satisfied, productive, loyal team that achieves expected results
- Safety—Excellent safety program, rating and culture
- Equipment—Well-maintained, highly profitable equipment division
- Owner's role—Provide leadership, direction and motivation; set targets and goals; keep employees focused on achieving results; seek new business opportunities; and stay active in the community
- Investments—Own investments that produce over $200,000 net income per year
What challenges, issues or problems do you need to fix over the next 5 years to make your business work for you? Write out what you want your company to become in the next 5 years, including specific targets and goals you want to accomplish and achieve.
To submit a question for George Hedley, email Associate Editor Elizabeth Manning at firstname.lastname@example.org.
The 5-Year Vision Worksheet
- Describe your ideal business in 5 years.
- What do you want the business to become in that time?
- Characteristics, description and direction
- What you do, how you do business and how you lead
- Specialties, expertise, niches, divisions or departments
- Where you do business (geographic area or locations)
- Size, revenue and growth
- Profits, dividends, finances, equity, wealth and investments
- Customers, markets, projects, contract types and services
- Strategic partners, opportunities and joint ventures
- Organizational structure, leadership and management team
- People, employees and training
- Project management, estimating, administration, supervision and field
- Accounting and financial management
- Productivity, tracking, job cost and technology
- Equipment, revenue, profitability and management
- Ownership's role
- In 5 years, what would make you excited about your business?
- What results or improvements have you made?
- What challenges, problems or issues have been fixed?
- How would the business operate?
- What would it do and how big would it be?
- How much money would it make?
- What type of projects would make it better known?
- What type of customers would it target?
- How would it be organized, systemized and in control?
- What would it do for the owners?
- In 5 years, what ongoing results do you want the business to achieve?
- Wealth and investments
- Personal and freedom
- In 5 years, what has to happen in your business to be happy with your role and results?