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How good planning will make you a better leader

March 5, 2018

lead your business more effectively by planning aheadMost people have some opinions on what makes a good leader. High on the list in one form or another are “resolve” and “vision” – but these are pretty nebulous terms. How are aspiring leaders meant to achieve these qualities?

Neither quality guarantees success, and if a leader suffers setbacks, changes track or fails to provide the leadership they strive to, then that “resolve” and “vision” become harder to maintain.

Leaders are meant to know where they’re taking people and carry through on their plans. The truth, as ever, is more complicated.

There are several ways to effectively provide leadership for a team. You might focus on being part of the team, generating camaraderie by overcoming challenges together.

You might have a lighter touch, a leader who actively tries not to micromanage in order to encourage your team to grow and shoulder new responsibilities, or get stuck into the detail of every part of the business and find ways to make things easier for your team.

Fostering your ‘resolve’ and ‘vision’

But even in these very varied leadership styles you can still see the qualities of “resolve” and “vision” being important components of good leadership. Both of these generate the trust necessary to hold a team together and inspire people to work for a purpose, rather than just a wage.

So we come back to our initial question. How to effectively foster your own “resolve” and “vision”?

You’ll find many answers of your own, but the one I have seen time and time again is that these two qualities are informed by knowledge of the business, and having a plan for the future.

It’s my contention that planning and understanding your business is actually an important foundation for good leadership – because it is a solid path to building those two key qualities – “resolve” and “vision”.

Planning is something that’s open to all of us. You don’t have to be a people person, and it doesn’t matter what your leadership style is, or how big or small your business is. Beyond its obvious benefits, planning can benefit us all because it provides a bedrock for important leadership qualities.

Trust

The first and most obvious benefit of having a plan is that it means you know where you are heading. Having a roadmap for your business, backed up by well thought-through financial planning can go a long way towards inspiring your team.

There’s nothing worse than a rudderless business (except a rudderless business that’s going bust, which is what often happens unless someone gets control of the rudder).

Transparency

Ultimately your team are a part of the business, just as you are, and trust is an important part of this mutually beneficial relationship. You all want the business to succeed, so it’s important that you can demonstrate that your plan for the business is leading to just that – success.

People will follow a charismatic leader and trust them on gut instinct, but deep trust requires a level of transparency rarely seen in some businesses. Make the businesses’ goals clear and realistic. Avoid secrecy and give your team the trust you hope they will feel in you and in the business.

Making good plans

Of course, the thing that really gives you confidence is having a plan yourself. As business people we all worry about the future – and planning is the most positive way to deal with these worries.

Good planning means planning for more than one possible future and being prepared to adjust your plans to suit changes in your market and in the wider economy.

If you have well thought through financial plans you will have a strong, realistic vision of where the business is heading. In turn, having such a thorough understanding of your business and its future will give you the resolve to enact that vision.

The key to good planning is to have plans for several situations. Sometimes changing what you plan to do can be seen as a sign of weakness and provoke distrust. In an ideal world this shouldn’t be the case – there is nothing inherently wrong in changing direction at all.

In fact, in many circumstances it may be the bravest and wisest course to take. By discussing your plans and your reasoning with your colleagues you can show that the best choice is to change course. Battling inertia in business can be hard work – but if you have a plan you’ll have a lot more support for the change you’re proposing than if you don’t.

Plans do change – but by planning regularly you will be able to always act on the best information available to you.

How to get started – Making a simple financial roadmap

I think about financial planning every day. But I’m pretty unusual! If you’re just getting started and don’t have any prior financial knowledge then making a financial forecast can seem impossible.

This is especially true for startups who don’t know for sure what kind of revenue they’ll be generating next month, let alone next year. But making a financial roadmap is easier than it sounds.

If you’re not an accountant, start from the ground up. Every action your business could take in the future has a financial consequence. It will be a cost to the business, or will bring in a certain amount of income.

Write out the different courses of action the business could take in the future, including just continuing as it is. For each of these paths, list out the monthly costs to the business that the course of action will take, and the estimated income the business will receive by pursuing this course of action.

For example, lists of ideas and rough costs like this could be the start of your plan (we all need to start somewhere!):

Carry on as we are

Income: + £10,000 per month

Costs: – £9,000 per month.

Project: Build a new website

Income: + £500 a month, starting in 6 months time.

Costs: – £2,000 one-off cost, followed by – £100 monthly maintenance, – £150 monthly advertising spend

Over the course of a single year, the project of building a new website will cost the business £4,750, but will only bring in £3,000, for a net loss of £1,750.

The following year however, provided the maintenance and advertising costs do not increase, the project will produce a net income of £3,000 a year.

If some of these projects require up-front investment for no immediate gain (such as the new website in the example above) start to record when these projects costs are likely to be incurred, and when they are likely to start producing positive results.

Free business planning tools like Brixx make can this process easier and produce unified outputs for all of your financial activities to help you see where your business is heading.

About the author

This article has been written exclusively for ByteStart by Robin Booth of Brixx.com the financial forecasting app that turns your ideas into numbers. Robin is a regular ByteStart contributor, and other articles he’s written to help business owners to get to grips with forecasting include;

Business planning – Further Resources

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