Business Planning

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Overview

Directors of startups and SMEs who have no business plan are unable to attract investment when required, satisfy existing investors that their money is safe, demonstrate how they will continue to grow profitably, communicate their company’s short and long term strategy to employees and often have difficulties with their bank.

Whilst many company directors agree that having a business plan would resolve a number of issues, they don’t have the time to produce one. Or they’ve been put off by the perception that once it’s been produced, it’s out of date and only acts as a large and expensive paperweight.

Here are some typical activities and benefits companies can realise from engaging in business planning:

  • Provide a clear statement regarding the organisations vision, strategy and objectives.

  • Identify the individual directors past experiences and how these will combine to provide a strong management board.

  • Produce a business plan that can be used to attract additional finance to fund further growth.

  • Provide a significant proportion of the documentation required for a grant application.

  • Provide a clear and easily communicable strategy to stakeholders and employees.

  • Identify and quantify potential risks and resolution strategies.

  • Help the directors demonstrate that they have the appropriate contingency plans in place regarding statutory business disaster recovery.

  • Maximise the value of the company in preparation for an exit sale.

Take note of the following points:

  • For spin out or start-ups ensure that the aspects of intellectual property, trademarks etc, are covered

  • That new business names comply with existing legislation and that the associated domain names are available

  • Make sure potential competitor actions are understood and mitigated against

  • Review of legal documents such as property leases, supply and purchase contracts

  • Aid the directors in satisfying the requirements of the bank regarding loans and or overdraft facilities

  • Demonstrate that risks have been understood and strategies in place to mitigate against them

  • Demonstrate that cash flow and financial forecasts are understood, managed and planned

  • Establish that the market is really ready for a new introduction

  • Prove that the product or service is ready for the market

  • Identify opportunities and areas for employee development

  • Show that ‘what if’ scenario planning has taken place

  • Provide a timetable for future profitable growth and the investments required to achieve it

Change Management is the ability to implement effective and sustainable changes to an organisation, its strategy, its processes or people.

Change may be necessary because of:

  • Changing strategies to manage different company requirements or owners

  • Changing markets, perhaps driven by the current economic climate, with consumers being choosier about their discretionary spending

  • Changing processes to cope with increasing regulation such as the FSA, or Quality Standards such as ISO91001

  • Changing people and their attitudes, to deal with new approaches or processes

Change Management leaves business-owners uncomfortable. It can be straightforward yet often seems complex. It is an area which benefits from experience in projects, people and processes.

Many business owners and senior managers have different skills than those required for changing an organisation and often they don’t have the time or expertise to undertake change successfully. Sustainable change relies on experience, skill, tenacity, resilience – and the commitment of the business owner.

A typical Change Management programme has several steps including:

1) Creating urgency
- you need to take action by developing a sense of need and importance for change. Get help; identify threats; develop scenarios; examine opportunities; begin discussions – and explore options.

2) Form a coalition
– to lead change you need a team whose powers come from a variety of sources including their own network and relative political importance. Get their emotional commitment; ensure you have a good mix of individuals – and a ‘team ethos’.

3) Create a vision
– clarity is important. Mixed messages don’t work, and create confusion. Determine values central to change; develop a vision; and ensure your implementation team can convincingly describe it in under five minutes.

4) Communicate the Vision
– announce the change, then ‘walk the talk’. Spread the message. Be consistent. Drive the vision through all aspects of the organisation.

5) Remove obstacles
- This may need a lot of thought about how to persuade –not coerce – people into your vision. Identify those who will support change, recognise and support those taking the lead, and be firm. Change the processes, structure, and if necessary, the people.

6) Create short-term wins
- Nothing succeeds like success. Make sure you identify and enjoy early wins. At first, smaller is better, and more expensive projects can come later, with the success of earlier initiatives behind them

7) Build on change
– find ways to embed change. Analyse change, see what went well and what needs further consideration.  Think about Continuous Improvement so that review and change is always encouraged.

8) Anchor change
- Make it symbolic. Make it part of the way things are done. Make sure your leaders continue to support change, including ensuring that their eventual replacements also support the culture and outcomes.

A good consultant recognises that change is only sustained if the business owner is supported through the process. It’s not easy – and needs continual focus, honesty and drive. But the differences between those that ‘do’ compared to those that ‘plan’ are immense

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