Have you got an up-to-date business plan? If not it’s high time you started working on one – this may be causing a lack of focus in your business and the knock-on effects of that are huge.
The management team don’t know what the priorities are and may be working hard, but are they working in a way that will deliver business growth? Your employees don’t know what the purpose or mission of the company is and are making their day-to-day decisions about what to do and where to put their effort in a vacuum … this leads to dissatisfaction, de-motivation and low productivity. Do you even know what productivity you should be achieving? Without a clear plan, the business will be reacting to market demands and with the current economic challenges, this leaves it very vulnerable. These are just the tip of the iceberg …
Business planning doesn’t have to be onerous, in fact once you get into it, it can be great fun and generate new enthusiasm for the business and the opportunities that are out there, just waiting for you to grab them.
It can speed the whole process up and ensure the right questions are asked, if you work with a facilitator to develop strategy and business plans. The facilitator will bring the processes of strategic thinking as well as creative thinking and effective ways of working together to gain insights, understanding and commitment to the goals and strategies that will deliver business success.
Here is an outline of the key components of the business plan to get you started.
Purpose or Mission
Why does the company exist? What are you in business to achieve? You need to be able to articulate clearly in one or two sentences what the purpose of the business is. This needs to be specific as it forms the framework for all the company does and helps people in the organisation make decisions. It needs to answer at least the questions Who (is the target market), What (are you offering), Why (should they buy) and may answer How?
Longer-term Goals
Where do you want to be in (say) 3 years?
Move forward in time to that point and paint a picture of what is happening. Put in as much detail as possible to create a ‘solid’ sense of the position of the company. How big is it – organisation structure? What does it feel like to work there – culture? How does it fit into the market place? What kind of relationships does it have with customers / suppliers? What makes it successful?
This is not a fantasy exercise, but one where you imagine a real desired future. If you put elements in that don’t feel possible, modify them to feel do-able, then crystallise this sense of the future to make the image clear for all. The clearer this is, the more you inspire everyone to make it happen.
Strategy
Now you have to step back and think through what has to happen to make this future position come true. What strategies take you on course to this future? What does the company have to stop doing? Start doing? Do better / more of? What are the critical points along the timeline from now to that 3-year position? What are the critical success factors – things that must happen for this future to be real? Those critical success factors will often determine your core strategies.
Objectives for the year
You now have a clear goal for year 3 and the main strategies to get you there and key milestones on the way. Where do you have to be in 12 month’s time to be on target to achieve that goal? Define the goals /objectives for the year and identify the Key Performance Indicators that you need to measure to monitor progress.
Functional strategies
Now break down those objectives into annual strategies / plans by function and make sure you notice inter-dependencies between functions and that all strategies / plans are aligned and you are planning resources appropriately to deliver the desired results.
Tactics
What precisely are the functions doing? Break down those functional strategies in detail to identify what each department will be doing over the year.
Budgets
Make sure you tie these plans together with budgets, so you know you have the resources in place to take the actions you plan and what these actions will deliver in revenue.
Monitor and review
Your business plan should be a live document that helps guide the business activity and monitor achievement of goals. When circumstances change it is relevant to amend the plan, however, just because you haven’t achieved the planned 25% of revenue by the end of the first quarter, this is not a reason to change the year-end goals. Rather you need to monitor the pattern of sales and rethink your efforts to achieve sales – maybe your marketing plan is not working as desired.
Keep on top of your business by actively using your business plan.
Amanda will be running a seminar on business planning on 26 January, please register your interest by email. If you want to discuss this article or find out more, please contact amanda@amandabouchconsulting.co.uk
