The Kitchen Sales Coach Issue #12 - Strategic Planning is a Must
By Robert Foltz, CKD
Over 90 percent of New Year's resolutions are given up before March. Why? Resolutions are usually about giving up something, which make them very negative. Strategic planning, on the other hand, is about setting goals for what you're going to accomplish! This is a very positive message about achieving your goals.
If you dwell on what you don't have, you usually won't get it. I suggest that you change your mindset to think about what you want, and work on making the changes to get it, regardless of what the economy's doing. The only thing that matters is what you decide to do for the new year.
I started performing strategic planning about six or seven years ago. It really doesn't take much time at all and will only be one page long. However, it needs to be fluid, allowing for change. For example, I wanted to lose 20 pounds last year. It didn't happen, despite me working out four to five times a week, every week! I'm adapting my goals this year, because I measured what I was doing that prevented me from losing the weight. It's about measurable progress toward your goals, adjusting, and staying on track. There should only be about four or five categories to start with.
The categories can be adjusted, but keep them simple and short at first just to get used to the idea of this new annual tradition. My wife and I sit down over a nice bottle of wine and a fruit and cheese plate, look at last years plan, and start brainstorming together.
Categories to start with in your strategic plan should be:
- 5-year business plan: Think about where you want to be in five years, envisioning your level of success. Don't be overly realistic; be optimistic and challenge your status quo!
- 1-year business plan: Take your current sales level, customer count, or customer service policies to the next level. Here you need to be realistic, yet stretch yourself just a bit more than you're comfortable doing. For example, if you're doing a million dollars in sales and you write down a goal of doubling that to two million for next year, you need to have a specific plan to achieve that higher sales level. Write down how you're going to increase sales, and then put down a number that's achievable, yet still makes you squirm a bit. Going outside your comfort zone is always positive as you stretch yourself to reach new heights!
- Professional mastery: Take educational courses to learn what you don't know about your business environment. Don't get stuck in what you're doing now without learning new things. I know a lot of great people that are so close-minded about learning new techniques or strategies that they're stuck at their current level of financial success. Whether you're earning $50,000 a year or $250,000 a year, earning more money is always a positive!
- Money and finance: Write down the level of income that you want in the new year. It's very important to write down how you're going to achieve this, as well. Again, stretch yourself out of your comfort zone!
- Family and personal life: Make of note of your vacations you'd like to take and other personal achievement goals for the new year. "Spend more time with….." is a good example. Balancing your personal life and business life is a key to overall success and happiness. If they're out of balance, then the achievement of any goal is nearly impossible because your energy will be spent on getting back in balance instead of moving forward toward your goals.
- Health and fitness: This speaks to balance again-balancing a proper diet and exercise with relaxation and enjoyment.
Strategic planning is about a winning attitude and achievement. No matter what the level of achievement you're looking for, moving forward is the key. Forget resolutions and write down your strategic plan for the new year!
Who's Your Ideal Customer?
When I sat down and wrote about my business' ideal customer, I 'fired' my biggest customer after the next job. It was the best move I made for the profitability of my business.
Sit down and write down who your best customers are and what they look like. For example, you might write, "Middle aged couple, living in their house for ten years or more, household income of approximately $120,000, college educated, understands construction and has completed projects in other areas of the house."
Notice the components of the profile:
- Geographic & demographic
- Income level
- Education level
- Construction knowledge or experience
This will help you identify prospects whom your business should aim to attract through marketing and branding. What it also does is help you recognize who shouldn't be your customer-that will save you time and money!
Going after builders when you aren't set up to handle the decreased cash flow, write-offs, and lower margins that they require is business suicide. Conversely going after high end consumers when you're set up for builders or lower end do-it-yourselfers is pointless and a waste of your time and money.
You must also have the proper showroom and systems to cater to your ideal customer. Ideal customers should represent 80 percent of your business, the majority of your referral base, and your profit center base. Why? Because they want your particular services and products and they appreciate what your business does best. As a result, they'll spread the word to their friends.
This brings me to another point. If you lower your price to get a particular job and the client refers you, who do you think they are going to refer you to? You'll get another price shopper!
Look around at your friends, and you'll find that 80 to 90 percent are in the same income and educational brackets as you are. People tend to hang around others similar to them. Remember that when it comes to your ideal customer and referrals.
Take a few minutes, go over the last ten very profitable jobs from last year and write down those customers' profiles. This will give you a head start on who's your ideal customer. Then go over the jobs that were a struggle or were less profitable. That will give you and idea of who is not your ideal customer.
Write down your ideal customer and pin it on a wall in your office. Every time these kinds of customers walk in the door, you'll recognize and be able to cater to them and sell them your products and services.
About Robert Foltz, CKD
Robert Foltz, CKD is experienced in all areas of the retail kitchen and bath business. As a manufacturers' representative, his experience and expertise can help improve your business. He also works as a sales trainer, consultant, and personal coach.
With 23 years of experience in every area of the kitchen business, he has personally experienced the most common mistakes all business owners and sales people make. He has used that experience to develop a formula that will help you avoid those common mistakes and to dramatically accelerate your success.
Robert can be reached at and his work can be seen on www.KitchenSalesCoach.com.