Every new year, you can’t fail to miss all the articles in the papers and magazines about losing weight and getting fit as part of a healthy start programme. But these principles can also be applied to your business.
At New Year, most business owners come back from the festive break with renewed vigour, energy and full of ideas. The key is to tap into these ideas and thoughts as soon as possible before they are forgotten.
There are some that say you shouldn’t plan at all and that business plans achieve little. This is a mistake. The two quotes I use on this subject are ‘good plans shape good decisions’ and ‘fail to plan, plan to fail’. Of course, if the plan is produced and then placed in a drawer and not shared, communicated or reviewed until it comes out the following year, a business will see no benefit from the plan and it will be a waste of time.
A good strategic plan will provide four elements
1) Review where the business is now
It is very important to assess the current position of the business and the environment in which it is operating. External help and views are helpful at this stage to provide some independent thoughts and assessment. External advisers have experience across many types of businesses and this experience can be invaluable.
2) Show where the business wants to go to
If a business does not know where it is going, it might end up somewhere else. Understanding the market dynamics and drivers in which a business operates will aid this planning. Look to see where the growth will come from. This could be new products and services and/or taking customers from competitors.
3) Provide the detail of how to get there
This will show the detail of what needs to be done to get the business where it wants to go, and the additional resources required whether this be people, assets and/or extra funding. These resources can then be planned and/or obtained to meet the need.
4) Performance goals
Execution of the plan is fundamental to the process. Goals and reviews need to be in place to manage this. Once the plan is agreed, it needs to be communicated to those involved in delivering it. There must be a regular review of the progress and performance. Naturally, circumstances change and the plan will evolve throughout its life. A detailed review needs to take place every month. However large or small a business, a monthly equivalent of a board meeting to assess, review and update plans is essential.
Some top tips on planning
- Force yourself to plan
- Meet away from the office to avoid distractions
- Involve your management team and employees
- Bring in external help to add independent views and thoughts
- Understand your market dynamics, drivers and the competition
- Plan the timing of any additional resources required
- Remember that nothing is set in stone; plans will change and a business needs to be agile
- Execution of the plan is all important and regular reviews are essential.
About the Author: Financial advisor Peter Black ACIB, AMCT, MBA has over 20 years of banking experience and runs Snowball Consulting, a firm helping SMEs with strategic, funding and banking matters via www.snowballconsulting.co.uk.
Last updated 6th June 2016
Strategic business planning tips for growth