As in football, game plans useful in business

March 09, 2011|A column by Kerry O'Tool SCORE counselor

Are you running a business?  Is the business adequately profitable; are you meeting your objectives? Do you usually keep score by looking at the bottom line? How quickly do you make changes when things aren't going the way you expected? How do you know what to change to improve your situation?

In many ways, running a successful business should be similar to managing a football team. For your business to be successful you should have a good game plan for the products or services offered, your marketing, and the control of your internal cost structure.

NFL team managers prepare a game plan before every game. Their plan is unique for each opponent and adequately detailed for each critical area of team performance. This includes the offensive unit, the defensive unit, and their special (kicking) teams.

Good managers also identify several key metrics for each area of performance in order to quickly determine during the game whether or not their plan is working effectively. They don't rely on just the number of points scored (the bottom line). If they only watched the score board they might react too slowly or they might not know what changes to make in order to improve their second half performance.

Football team key metrics usually include the following, plus many others:

-- Number of rushing attempts right & left of center, yardage gained, and yielded

-- Number of completions and passing yardage, long & short, both gained and yielded

-- QB sacks, penalties, kick return yardage, interceptions, third-down completions, etc.

Every good business manager similarly needs to track the right metrics in order to determine the effectiveness of each critical area of his/her game plan, and know what to change if the plan isn't working.

For example, a successful business must offer the types of goods and/or services that customers either need or want; and they must be offered at competitive prices. If your business has enough customer visits but not enough cash register sales then your game plan isn't working.

In addition, a successful business must also use the appropriate marketing techniques to attract an adequate number of customers. Unless you rely solely on walk-in traffic your potential customers also need to know what products and services you offer, and where they can find your business.  If you don't have enough customer visits then this part of your plan isn't working.

Also, a successful business should be a low cost provider of its products or services. This is true regardless of whether you're selling clothing, food, hard goods, hotel rooms, or accounting services. Your internal cost structure must be lean and competitive to survive over time. If not, a competitor can move into your territory, undercut your pricing, and steal your customer base. Do you have enough sales volume to cover your fixed operating expenses? Is there too much waste in what you do or how you do it?  Is your game plan working?

You should prepare a new game plan at least annually.  Such a plan identifies your shorter term tactical plans for reaching your longer term business objectives. Each year's plan should be revised to address changes in your customer base, changes in buying habits, changes made by your competitors, or by the entrance of new competitors in your area.

If you don't have a game plan or your plan isn't working, or if you don't know what metrics to track in order to make the right revisions to your plan, then get help.  A good place to start would be by contacting your local SCORE chapter where experienced business advisors are available to help at no charge.

Kerry O'Tool, a Petoskey resident and certified public accountant, is a volunteer business counselor with SCORE's Tip of the Mitt chapter. O'Tool is retired from a career that included a position in public accounting, as a financial officer for medium-sized manufacturers and as an operations executive for a large international automotive component supplier. In his last position, as director of continuous improvement, he was the lead TPS (lean manufacturing) change agent. The "Scoring in Business" columns written by local SCORE volunteers appear the second and fourth Wednesdays of each month on the Business page. The SCORE chapter can be e-mailed at Mail can be sent in care of the Petoskey Regional Chamber of Commerce, 401 E.Mitchell St., Petoskey, Mich. 49770.

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