Too often, especially when times are bleak, home inspectors neglect updating their business plans to reflect the changes in their marketplace. How important is a current plan? Whether your business is a one-person start-up or multi-inspector firm, a sound plan is crucial. It's like the steering wheel on a ship. Even a ship in great condition, except for a broken steering wheel, will spin hopelessly in circles. Having a direction and a setup of waypoints makes a huge difference.
Updating your plan or creating a new one is not difficult. Business plans can be one page or book sized, based on your needs, the level of detail desired and what will work for your business. I break my business plan into the following five basic elements:
Analysis – Taking a critical look at my business over the past year.
Goals – Establishing what I want to accomplish in 2011. For example: I want to gross $100,000 and get into five new real estate offices.
Tactics – How am I going accomplish my goals? I set objectives and then develop the tactics necessary to meet my objectives. For example, my objective is to gross at least $8,750 per month. There should be several tactics to support each objective.
Timing – Some tactics are time-sensitive, and they should be part of the plan. We usually have a calendar that lays out our marketing activities.
Metrics – Measuring success or failure is critical to executing the plan. Once a month, we review where we are, what's working and where we need to place greater focus.
Creating your plan for the next 12 months
To start, it's important to understand what's happening in your marketplace and how your company has been performing. This is the analysis part of the plan. Here are some questions to ask yourself:
- What is working well?
- Where is my business coming from? (ads, web, referrals, realtors)
- What are my company's strengths?
- What is working well for my competitors?
- Where do I believe I'm losing business?
- Are there business opportunities I haven't been taking advantage of? (For example, specialty inspections, etc.)
- What is my cost of doing business?
- Where are my greatest costs?
Next, establish the goals for your company. Many small businesspeople simply say "I want to have $250,000 in sales," but to succeed, we want to be more granular than that. Let's say the overall goal is to make $250,000. What smaller goals or objectives do you need to reach that much in sales? Typically, you will have five to 10 smaller objectives that support the overall goal. Examples are: "I want to do five office presentations each quarter," "I want to be the first inspection company in the Google search results for my town" or "I want 30 percent of my business to come from past customer referrals."
Tactics will describe the steps necessary to accomplish each objective. Tactics are well-defined tasks that easily can be measured. To get to the top of the Google rankings, you will need to do things such as have your website optimized for the Search Engines, create back-links and have a blog. To get into real estate offices to do presentations, you will need to go into those offices and ask to be put on their calendar.
Timing is scheduling when things are going to happen. I usually have a timeline that covers my goals, objectives and tactics for each month. I post it next to my computer so I can remind myself of what I committed to do for that month or quarter.
Many businesspeople overlook metrics and just focus on whether they accomplish their big goal. In a dynamic environment such as real estate, missing your goal can be frustrating. That is why you also should be measuring the success of your plan by looking at the each of the individual tactics and goals. Doing so allows you to judge how your plan is performing and to tweak the underperforming areas. For example, we look at the source of our customer referrals on a monthly basis and decide if we want to increase our marketing to past clients or our Google Adwords budget.
Many small businesspeople let the business drive their actions instead of driving their business. Without a plan, it's next to impossible to be in the driver's seat. If you want to be in the driver's seat, you need a plan to tell you where to go.