Revenue: That Extra 10%

Business people often talk about given an extra ten percent. But how often do they talk about getting an extra ten percent? With some extra effort, you can turn your business planning process into a way to bring in any extra ten percent of next revenue each year.

Business as Usual

Develop the business plan with the usual rigor. This includes: market, competitors, new products and offers, take rates, pricing, discounts and other assumptions such as sales and distribution channels. Use these steps and processes to develop the gross and net revenue projections for the upcoming fiscal year. The process needs to not only involve planners but also line organizations responsible for delivering the results.

The Extra 10%

Once the business plan is complete including all the assumptions and strech for year over year growth the plan must be reviewed and approved by management. This being done, it is up to the senior leader or the senior planner to overlay an additional ten percent NET revenue on top of the total projected revenue for the upcoming fiscal period. The new uplifted figure must go back to the planners and line management team to relook every assumption and data element in the plan to achieve the high net revenue figure. Nothing less is acceptable.

Approval

After the business plan has been developed by the planners and line managers it much be reviewed by senior management. While nothing less than the ten percent uplift or overlay is acceptable for net revenue, even so every assumption in the plan must be tested and challenged. After a complete review of the plan, all line and planning senior management must approve it. If agreement cannot be reached on any of the assumptions of resulting revenue figures (by product and sales channel), then the plan must go back to those who developed it to reconcile any open issues. The importance of buy-in and complete alignment on the plan cannot be stressed enough.

Business planning is more than an annual exercise. It is the fundamental building block for future revenue in any business. Organizations must do more to challenge assumptions and go beyond "stretch" objectives. A ten percent additional net revenue growth exercise on top of a stringent business as usual plan is one excellent way to accomplish this goal for any business.

George F. Franks, III is the founder and President of Franks Consulting Group, a Bethesda, Maryland management consulting, leadership coaching and speaking practice. Franks Consulting Group is on the web at:
http://franksconsultinggroup.com
George can be reached at:
gfranks@franksconsultinggroup.com