Successful businesses develop strategies, build business plans and then most importantly, execute these plans. The same is true of business executives. Those who build and then consistently execute their plans are more likely to achieve their professional and personal goals.
A personal business plan is not merely a household budget or a list of goals. It is a comprehensive planning approach to all facets of your life. Think of your personal assets in two “classes”: human capital and financial capital.
- Human capital is comprised of your education, work experience, and skills.
- Financial capital is your income, savings, and investments.
Take a disciplined approach to YOU, Inc. that mirrors a business planning process with these five steps:
- Where are you now? (Situation Analysis) A framework often used in the business world is the SWOT analysis – Strengths, Weaknesses, Opportunities and Threats. For your Human capital, build an inventory of your experience, skills, education and strengths. Pull together your financial capital information, such as your income, savings levels and cash flow statements. Do you know how you are spending your money? Are there threats or opportunities to your financial situation?
- What do you want to achieve – and when? (Goals) What is your ideal life? Ignore what others want or expect from you – what do YOU want to achieve? What we find is that people who identify specific goals are much more likely to make the necessary changes to realize those goals. Once you know the target, your commitment level increases.
- How do you get there? (Gap Analysis & Strategy) Now the tough part starts. Build a plan with timelines, budgets and targets. What action do you need to take to reach your goals? In the human capital area, are there new skills or experiences you need to acquire? Do you need more education to reach your career goals? Put together a three-year plan that defines what you need to do to upgrade your skills. In the financial capital area, do you need to change your spending patterns and/or income levels to reach your goals? Do you need to alter your investment plans? Build a comprehensive financial plan that includes various scenarios incorporating several timeframes.
- How do you get it done? (Implementation) A good plan never implemented is worthless. When implementing your personal business plan, determine who will help you. Executive or career coaches can help you with the human capital issues, while financial planners, estate planning attorneys and CPAs can all play roles in your financial capital plan. However you choose to proceed, commit to it and get it done!
- How well are you doing? (Monitor and Adjust)
An effective business planning process is continuous, positioning the business to adapt and thrive in changing circumstances. Your personal business planning process requires the same discipline, undertaking regular, periodic reviews to assess your progress. Use questions such as:
- Are you hitting your key milestones?
- What has changed or transitioned, either in your goals or in the external world, which may impact your plan? What do you need to do in response?
- Are you implementing adjustments in a timely manner?
Apply your business skills to your personal life. Operate as if you are a business by consistently building and executing a personal business plan. It will set you up for success in all facets of your life.