3 Steps for Applying the Merlyn Principle in Business Planning
In T.H. White’s The Once & Future King, Merlyn explains how he predicts the future: “Now ordinary people are born forwards in Time… But I unfortunately was born at the wrong end of Time, and I have to live backwards from in front, while surrounded by a lot of people living forwards from behind. Some people call it having second sight.”
If you want to predict the future of your business, then start by developing your exit strategy and work backwards. Here are three steps for doing so.
Step 1: Create Your Exit Strategy
It can be uncomfortable to explore the answers to questions like, “How long will I live? How much money will I need for retirement? When should I retire?” This may require the help of a financial advisor who can guide you through the process of determining:
- How much you will need to live on in retirement
- How much your investment portfolio will provide
- The gap between the two – or what you’ll need to generate from the sale of your business
- How much revenue and profit you’ll need to generate to sell the business for what you want
- How many years it might take to generate that business, which gives you a prospective retirement date
- Annual revenue goals based on realistic growth targets
Step 2: Complete Your One Page Plan
Once you have created your exit strategy, you will need a strategic plan for how to generate those revenues and profits each year to keep you on track to retirement.
The One Page Strategic Plan, developed by Verne Harnish, is a simple and powerful way to do this. This will help you identify what you need to do to hit your revenue and profitability targets ever year for at least the next 3-5 years.
It’s very difficult to have the discipline do this on your own, especially if you’ve never done so before, so hire a business coach and involve your company’s leadership team.
Step 3: Create a Marketing Plan
There are so many things you could do in marketing to grow, so what should you do? It’s important to audit your current marketing to identify:
- Problems that need to be fixed to improve thought leadership and lead generation
- Opportunities to further accelerate sales and marketing results
- How to take your business to the next level
Once these are identified, it becomes relatively easy to create an annual marketing plan that includes the right marketing mix across Joseph McCarthy’s Four Ps of Marketing, especially with the help of an experienced marketing consultant:
- Marketing Communications/Promotion: brand story, website, content marketing, SEO, pay-per-click (PPC) advertising campaigns, advertising, PR, videos, events, and social media
- Products & Services: roadmap, product management, target markets, differentiation, and market segmentation
- Distribution Channels/Placement: sales and marketing programs, discount structure, recruitment, and marketing
- Pricing: market value vs. cost-plus pricing, end-user vs. channel pricing, and competitive intelligence
What Are You Waiting For?
Can you answer this ancient Chinese proverb: when is the best time to plant a tree?
Answer: 20 years ago.
Second best answer: now.
Start now by consulting your financial advisor, business coach and marketing consultant and plot your path backwards to the future.
