I know I tend to labour the point on business planning, but it can have such a successful outcome for so small an effort.

To illustrate my point I have summarized a report by the University of South Australia, which recently surveyed 650 CEO's of small and medium sized businesses about their experience with a business failure.   More than 20% had been involved with a collapsed business, and many had experience with a business in severe difficulties.   In total, 253 reasons for failure were offered, not the generic results we see from ASIC ('difficult conditions, ran out of cash, etc'),

The reasons were:

- Inadequate leadership and management (inability to react to changing conditions) (13%) and poor planning and execution of strategy (25%)

- Insufficient market research, and inadequate marketing and sales skills (17%)

- Poor financial management, including excessive cash drawings by owners (13%)

- Wrong strategy selection, poor implementation, inadequate financial reporting, poor people management skills, and lack of delegation (13%)

- Wrong governance structures (poor decision making) (11%)

- Product and service problems (7%)

One thing I learned while doing an advanced MBA and from following small business studies over the many years, those who succeed invariably plan in some depth for the year ahead.   They take stock of the present situation and also ask themselves the questions to be able to develop plans and tactics in order to grow:

- Are we prepared to move forward this year?

- Where do we want to be in 12 months?

- To get there, what do we need to do?

- What action plans are needed quarterly (monthly and weekly) to support out strategies?

- Do we have processes and systems to measure progress?

- Do we have the resources needed (funds and cash flow)?

- Who will keep us accountable?

To me, accountability means testing the business plan with forecasts of profits and cash, measuring results regularly against KPI's and milestones, interpreting financial results, and using someone to bounce ides off or just to check with when problems get tough.

Remember, there are really only a few ways to grow a business and increase profits:

- Generate more leads

- Improve the conversion rate

- Increase the customer retention rate

- Improve the average project value

- Increase the number of projects

Each one has a number of action plans (I have a Chart with over 400 strategies on it, so its not hard to find several that work for you) to get the desired outcome.   It has been proved that an increase of just 3% in each of these can double profits.

Take a few minutes and reflect on the last year.   Then, start building your plan with a new sense of vigour for the next 12 months.   Benjamin Franklin said, 'If you fail to plan, you are planning to fail'.