The Best Tool ever for Business Planning

Posted on December 22, 2008 by David Gass 5 Comments

If you are like me, you have spent numerous hours sitting in your office, on your laptop or even at a whiteboard, trying to figure out the best way to START planning next year’s goals and objectives.Until I discovered the one tool that would help me save thousands of hours over the years, I would get frustrated with trying to figure out where I begin in my planning.

Then I discovered the tool, and everything changed. With this tool I was able to not only save hours of time (priceless) but also was able to be more accurate in my future planning, create more clarity with action steps required to achieve the plan. And the tool is FREE. That’s right, free.

All you need to do is “Start at the End”. Start by determining what you want the outcome to be. So if you are planning your business goals for 2009, one of the goals is very likely set around the amount of revenue you want to generate for the year. In order to create a plan to achieve the goal, start by writing down exactly what you want that goal to be then work backwards.

Here is an example: If you want to generate $1,000,000 in revenue in 2009 here is a formula for getting there. Divide $1,000,000 by 12 months = $83,333. $83,333 is the revenue needed per month. You can add this to an excel spreadsheet and if you want lower the number for the first few months of the year and then slowly increase the number throughout the year based on your seasonal sales.

If you need $83,333 in revenue in a given month you then need to figure out how much you need to sell each week, then each day. You can do this by dividing $83,333 by the number of days you are open each week. If you are open 5 days a week and there are 4 weeks in the month you divide the sales by 20 to get required sales by day = $4,167.

Next you need to know how many items you need to sell per day. If you sell an item that costs $100, you need to sell 41.6 of them. Of course, if you have multiple items you sell, just take an average of the amount an individual purchases while in your store. This gives you the average sale per customer. You can divide that by the required sales by day and you get the required number of customers you need.

Once you have determined the number of customers you need, you can then lay out a marketing plan for generating that amount of traffic to your store.

Also, once you have the number of customers required per day and average amount they spend per visit, you can start playing with the numbers. Take the average amount sold per customer and increase it just by $20 and see how that affects the number of people required to visit your store.

No matter what goal you have or planning you are doing using the tool of “Start at the End”, will save you time, money and get you to your goal much faster.