There are lawyers who lose sight of this. Hopefully they have a brilliant legal administrator — otherwise, their firm may cease to exist. But there is a lot more to business planning than revenue generation. Here’s a snapshot of it:
Critical analysis and active listening are necessary to sustain a successful business in the practice of law. Thinking everything through from beginning to end until you get the information needed and can anticipate future occurrences is essential for both short-term and long-term business planning.
It is vital to evaluate expenses on an ongoing basis to make sure they are appropriate and not excessive; competitive price analysis is a component of this process. Unnecessary and inflated expenses are harmful to the bottom line and may dissipate all profits.
Strategic business planning requires emotional intelligence (EQ) to be successful.
For initiating such strategies, there must be an order of priority in business planning. Start from the beginning with a mission statement, which is the foundation of your firm and why clients want to keep you in business. Secondly, plan as accurately and cautiously as possible, basing your decisions on facts, not assumptions and guesswork. (If there are no facts, planning must be handled with the highest level of intuition and business-savviness.) Stick to your plan, but if there’s a significant change in the business environment, then change management is needed. Inability to manage change can dismantle the business plan.
There are different planning stages. Long-term planning is most important, but always plan for the short-term as well. Approach both with a SMART method: Goals must be Specific, Measurable, Attainable, Realistic and Time-oriented.
Next, use the SWOT analysis, where you build up and strengthen your surroundings. You must analyze your Strengths and build upon them, and identify your Weaknesses and then correct them. Opportunities must be recognized and taken advantage of, while Threats must be discovered and eliminated.
To complete everything mentioned so far, you should have a management action plan (MAP). Everything must be in writing and have a timeline. To assist in this process, create and integrate a management action calendar (MAC). If delegating this, however, make sure you are aware of overall governance — from procedures and systems to job positions and operational manuals. Operational manuals really become essential if you want to expand or build up a strong management team. Be aware of paradigm and how to adapt and manage when change is necessary and inevitable. Environmental awareness and laser-sharp focus are critical in executing necessary changes.
In creating your firm’s governance, you need an organizational chart. Break down the levels of authority in your firm. In determining such levels, you must identify who is a thinker, planner or doer, or who has all these skills. For example, the highest level of management would likely have authority to act without reporting or seeking permission. The second level of authority would have the ability to act but would need to inform their direct supervisor. The third level of management would have responsibilities, but need permission first. The lowest level of management would have no authority. Ultimately, when the organizational chart has been implemented defining levels of authority, the firm is ready to excel.
Now that governance is understood and executed, start applying business planning to revenue. Begin by breaking down its generation in parts, and define where each part comes from. For example, in a media organization, if all revenue comes from selling advertising, they may need to inquire as to what percentage of this revenue generation is from which client. This is a key question because a business will fail if there’s no effective revenue generation. A business that cannot pay its bills goes out of business.
In speaking to your firm’s accountant, analyze what they tell you and ask follow-up questions to get the information you need. Be sure to keep asking questions until you get the desired information. You may have a brilliant accountant, but they may not know what you need. Communicate.
Understand what makes your business stand out from competitors. You won’t know what makes the firm successful if you don’t ask. Understanding what creates value in a business is a key to success.
Business planning affects revenue generation and keeps the lights on. Using strategies like the SMART and SWOT analyses, organizational charts and governance identification allow for the overall success and future of your firm.