Michael Gerber, author of The E Myth for Contractors, characterizes entrepreneurial builders as people who wake up, go to work, and fight fires day in and day out with no end of the game in site. That rings true to me. I constantly see custom builders who are running a business without ever looking up to see the finish line. Are you one of them? I challenge you to answer the following questions.
- Do you know how many more years you want to work in your custom building business until you reach financial independence?
- Do you know how much money you need to reach financial independence?
- Do you know what will happen to your custom building company when you decide to retire?
- Do you know what you want to do with the rest of your life?
If you answered yes to all of these questions you have taken the first step in the goal-setting and planning process. If you answered no to any of these questions you may be on your way to a lifetime of putting out fires until you eventually burn out.
So before this happens take some time to look at your company’s long-range goals. One of the best tools for goal setting is a strategic planning session. Staff members get together (preferably in an off-site location to eliminate phones and other interruptions) for a day or two to develop a company mission statement, identify key issues, establish objectives and strategies, and develop a work plan. Depending on the size of the organization the planning team comprises key management personnel or the entire company. An ideal size for a planning session is between eight and 12 participants.
The first step in strategic planning is deciding what the company is and what it is striving to become. Without a stated mission and goals, there can be no objectives or strategies. The mission statement defines the focus of the organization.
I find that the best way to establish a mission statement is to have all members of the planning group provide one or two words that best answer the following questions:
- Who are we?
- Why are we different?
- Why would a customer want to buy a house from us?
- Why would a trade contractor want to work for us?
- What are the values that best represent the company’s approach to business?
By putting these words into sentences most teams I have worked with develop a mission statement in a short period of time. If your company already has a mission statement the first part of the planning session should be spent reviewing the current statement and identifying any needed updates.
Roadblocks. Before determining your objectives, you must identify the key issues facing the team and the company. Every company is confronted with a variety of changing problems and opportunities. Key issues are defined as anything that can restrict the organization or prevent it from achieving its goals.
In this area of planning, review your mission goals and then identify what you think might prevent the company from achieving them. Participants should bring up all concerns, no matter how small. Make sure you have a flipchart and plenty of paper in this brainstorming portion of the planning. The facilitator should write down any issue that addresses restrictions, problems, and opportunities.
Once the key issues are established it is time to go into the objective-setting mode. Objectives should not be about how to achieve a certain result, only what you want to accomplish. They should be:
- achievable, but challenging.
- specific with a single-end result.
- consistent with the mission statement.
- easily understood by participants.
A well-written objective has an accomplishment verb (not just an action verb) such as increase/decrease, become, expand, achieve, or improve.
Once this part of the process is complete, most teams are overwhelmed with what it would take to accomplish all the goals they have set. It is critical at this point to prioritize and strategize. A well-written strategy is more specific than an objective and contains an action verb such as create, develop, change, identify, and recognize.
Just Do It. The work plan is the last step in the process and is most frequently developed after the mission statement, objectives, and strategies have been approved by top management.
Developing a work plan provides an opportunity for participation by those who will be responsible for implementing the plan. The work plan should be developed to answer the following questions:
- What needs to be done?
- Who should do it?
- When should it be started and completed?
- What are the approximate costs in staff man hours, direct expenses, and/or capital investments?
For each objective, I suggest assigning a coach who will be responsible for pulling together a team and tracking progress toward the completion of the objectives.
Once the team is assembled, its first goal is to establish a targeted completion date for the objective. In order to best accomplish the objective, I suggest breaking the major milestone into several mini-milestones. Each mini-milestone is then tracked with individual due dates.
Over the years I have seen many companies succeed in accomplishing their strategic goals. One common ingredient for their success was not trying to accomplish too much in too short a period of time. It wasn’t speed that got them to their goal. It was knowing where they were going that made all the difference in the race we call custom building.
Steve Maltzman, CPA, is president of SMA Consulting in Colton, Calif. He can be reached at smaltzman@smaconsulting.net.
