« Funding releases | Main | VC Board members and Articles of Incorporation »
December 02, 2004
The value of plans you can actually make
Was recently in a meeting with a terrific company when Gerry Langeler of OVP offered some seemingly obvious, but very sage advice.
He has seen a number of companies that had great sales growth year over year, for several years but for each of those years they were also consistently under plan. Great companies, but unhealthy planning practice. Stretch goals may be great to have, and it is really hard to plan accurately in early companies with little history, but not meeting plan poses all kinds of problems.
In contrast, stressed Gerry, setting revenue plans you can actually make may not seem quite as exciting but has lots of benefits:
* Benefit one - motivation of sales people. People like to make or even break plan by at least a little. If they don't they can't plan. They get bummed. They quit.
* Benefit two - board confidence. Happy boards don’t like sandbagging but they also like real visibility. Getting close to plan or beating it increases their confidence in you.
* Benefit three - team and other constituents, feel forward progress more than if you grow but "not quite enough"
* Benefit four - expenses, they seem somehow to magically stay more in line if you do not over plan for revenue. Appetites stay in check.
Anyway, may all be obvious but worth remembering as you start pulling together next year's plan. Underpromise, overdeliver.
Posted by at December 2, 2004 06:10 AM
Trackback Pings
TrackBack URL for this entry:
http://www.nwventurevoice.com/cgi-bin/mt-tb.cgi/1592
Comments
Post a comment
Thanks for signing in, . Now you can comment. (sign out)
(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)