Improving your business
Business Plans are like maps for tourists.
You need a plan for where you’re going to go, what you want to look at, where you’re going to stay and, if you deviate off track, you need to be able to identify where you are and then navigate to get back onto your original path.
Planning a business activity is very similar.
You need to develop a strategy and be able to determine where you’re at so that remedial action can be taken, if required.
Given the uncertainties confronting businesses because of COVID-19, border closures, lockdowns and the problems that these are presenting to business operations, it is desirable that all businesses prepare new Business Plans at this time so that the leadership team, directors/owners have had the opportunity of having a fresh look at the issues that the organisation could face in the next 1-3 years so that strategies can be developed now.
Your Business Plan should incorporate commentary on the people involved in your business — directors or owners, leadership team — together with a summary of the strategies that have been developed, the tactics for the implementation of those and the allocation of responsibilities for monitoring the supply of funding for the business.
A Business Plan is best prepared after input from all of the team. The key group is the leadership team, but it is desirable to have input from the other team members so that they have some ownership of the final document.
The Executive Summary is the overview of key data included within your Business Plan.
The Vision Statement enables the leadership team and directors to clearly articulate where they want the business to be in 3-5 years and normally includes a commitment to a regular ongoing review process covering:
- Strategies relating to financial performance, HR, marketing and operations
Business Plans normally contain a Strengths, Weaknesses, Opportunities and Threats Analysis (SWOT) which enables all participants to have commented on the key factors that make the business great, but also to comment on aspects of the business that they would like to see improved. This is a very important part of the process, because it allows all stakeholders to have input so that these reservations can be analysed, and strategies implemented to rectify any problems.
The leadership team’s direct responsibilities should be summarised, together with any specific professional development activities to be undertaken by individuals in the foreseeable future. This shows that the leadership team has a commitment to ongoing professional development, which is very important for businesses that are keen to identify their future aspirations.
No business can operate without its team members and it’s very important that a high priority is given in the business planning process to ensuring that adequate consideration has been given to the development of the team and that training programs have been implemented to ensure that team members maintain and grow their skills.
Customers are another important component and the planning process would be expected to incorporate a critical review of the services provided them, together with a commitment as to how the service could be improved in the future.
Research and development is a direct contribution to the growth of the intellectual property owned by the business and therefore, within the business planning environment, consideration should be given to identifying potential research and development activities which could add value to the business’ overall intellectual property.
Marketing is a very important component of business culture and the Business Plan should reflect this in respect of existing and potential customers across digital and conventional (traditional) channels.
Business leaders should be conscious of good relationships with key suppliers. The planning process would normally include comment on key suppliers and identify strategies to be implemented, if supply issues are encountered in the future.
The planning process enables the leadership team, together with the directors, to conduct a detailed analysis on external factors that might affect the business including competitor performance and marketplace position.
Risk management covers any potential issues that should be given consideration by the leadership team and an appropriate written risk response document should be prepared so that it is readily available in the event of a problem so that a series of documents can guide the team when making decisions in a crisis.
It is a sound commercial strategy for every business to have a communication policy, a crucial component of the fabric of an organisation so everyone within it should have an awareness that everyone has the opportunity of receiving communications whether it’s via a daily huddle, pre-start meeting, toolbox meeting or leadership team meeting. The meeting cycle should include a monthly business review meeting to be attended by the leadership team members where every aspect of the business can be considered.
A sound Business Plan includes an acknowledgement that succession is an ongoing issue within a business and relates to all of the team members, not just the leadership team or the Board of Directors. Progressive companies have an ongoing brief to encourage team members to document their current work assignments and to be ready, at all times, to move to other assignments at the discretion of the business. This is effective succession planning being conducted at all levels of the business.
The team at Alliott NZ are Chartered Accountants and business advisers with considerable experience in the development of Business Plans for a wide range of organisations. If you would like to have a discussion about the facilitation services that we can provide for the preparation of your Business Plan, please contact us in Auckland on 09 520 9200.