Tips for Getting Started with Your Plan

If this is the first time you are creating a Management Plan you will most likely not have readily accessible and accurate historical data upon which to base your initial assumptions. Don’t let that deter you from getting started! Base your initial assumptions on industry averages, your best guesses, or your goals.

One of the clearest benefits of using the Calculator lies in identifying what metrics are important enough to pay attention to. Once you have identified them for yourself by experimenting with the Calculator, it becomes easier to monitor actual performance in relation to them over the coming months; you can create your own systems for doing this, or utilize Fulcra Consulting’s tools and expertise. Tracking actual performance will give you accurate data, and next year’s management plan will be easier to create. As you continue the cycle of planning, tracking, reviewing and adjusting, the process gets easier and more accurate every year. Like learning to ride a bike, soon the process becomes automatic and you can concentrate on where you want to go.  

Review the sample management plan to familiarize yourself with basic relationships and the 10 assumptions you need to supply. Do not be distracted if the numbers in the sample seem dramatically different from yours; simply input your numbers to get a management plan customized for your company.

Create an initial option, entering your 10 assumptions, for use as a baseline. Note that only the first 3 assumptions are needed in order to generate a budget. The Calculator will provide value even if you only enter some of the assumptions.

Begin experimenting with options by changing one assumption at a time and noticing the impact, e.g. what happens to gross revenue needed if your operating expenses increase by $500/month? What impact does it have if you increase gross margin by 2%? The Calculator allows you to see the impact of these and similar changes instantly.

You can see, for instance, that increasing your gross margin lowers the gross revenue needed but it increases your needed pricing multiplier; here’s where you must apply judgment to the numbers: If you increase prices will you sell as many jobs? What sales training and/or support might be needed to successfully support a price increase?

By experimenting with several combinations of assumptions, and thoughtfully considering the pros and cons of each, you will arrive at a balance of assumptions you consider to be optimum for you and your unique business. These become your key metrics and the goals against which you track actual performance every month.

Considering various options and their impacts is an essential aspect of creating a management plan you can truly believe in—and that belief is what gives your Management Plan it’s power.

Richard Steven, Founder/President
"Helping Remodelers Succeed"
(651) 253-1764
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“ Working with Richard Steven and Fulcra Consulting took the mystery out of tracking sales, production and profitability.  He worked with my business and staff to help us meet our goals.”
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