Controversial statement: “Sailing by the seat of your pants is a choice that business owners make linked to their preferences rather than prioritise what is good for the business. It is not creative or innovative but often is something that can hold back business growth”.
As a small business owner, the daily demands of running your business can feel overwhelming. Between managing operations, servicing customer needs, and handling financial responsibilities, it’s easy to see why some business owners might neglect formal quarterly planning. However, flying by the seat of your pants can expose your business to significant risks. I want to explore why some business owners skip quarterly planning and risk the fallout of such an approach.
Why Some Business Owners Don’t Plan Quarterly
SME owners often wear multiple hats, leaving little time for strategic planning. The immediate tasks—like meeting deadlines, resolving customer complaints, or managing inventory—take precedence over long-term planning. This leads to a degree of firefighting where they respond to things that appear urgent rather than proactive tasks that can establish consistency.
Sometimes just the thought of quarterly planning can seem daunting. Business owners may believe that developing a detailed plan requires extensive time and expertise they do not possess, leading them to avoid the process altogether. Bus this thinking time does something else, it prepares them for problem solving and innovation. By playing scenarios out in your head you are giving new approaches and solutions a dry-run and that builds confidence and capability when problem solving.
One of the ‘traits’ that is frequently attributed to entrepreneurs, especially those who thrive in dynamic environments, is their ability to adapt quickly without a plan. They rely on their agility and decision-making skills to navigate unforeseen challenges. In my experience that is never done in a vacuum but against a context that is well crafted and fully understood. It is the in-depth knowledge of the operating environment that allows the flexibility.
The main risk of ‘Sailing by the Seat of Your Pants’ is inconsistency. Without a clear plan, business performance can become sporadic, with peaks and troughs in productivity and revenue. This is common when actions are reactive rather than proactive. Inconsistent planning makes identification and adoption of market opportunities much more problematic because of the number of unknowns at play.
A business without a plan lacks direction and focus. Being uncertain about priorities and goals, can lead to reduced morale and productivity. Clear quarterly goals align everyone’s efforts towards common objectives.
By embracing quarterly planning a business owner can mitigate these risks and provide several benefits:
· Clear Goals: Establishing specific, measurable objectives helps align efforts and track progress.
· Proactive Management: Anticipating challenges and opportunities allows for proactive decision-making.
· Improved Resource Allocation: Planning ensures that resources are directed towards high-priority tasks, maximising efficiency.
· Enhanced Performance: Regular planning reviews and adjustments lead to more consistent and predictable performance.
· Employee Engagement: Clearly defined goals and strategies improve team alignment and motivation.
· Financial Control: Forecasting expenses and revenues helps maintain healthy cash flow and financial stability.
While the daily demands of running a small business can make quarterly planning seem like a luxury, the risks of operating without a plan are significant. Inconsistent performance, missed opportunities, and increased stress are just a few of the pitfalls. By investing time in quarterly planning, business owners can set clear goals, manage resources effectively, and steer their business towards sustained growth and success. Planning might seem daunting, but its benefits far outweigh the effort, providing a roadmap to navigate the complexities of business ownership with confidence.
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