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Archive for the 'Writing a Business Plan for Growth' Category
The plan is complete, so you have a strategy and/or a plan for business growth. You have implemented it or worked with a business growth adviser to implement your growth plan. The next thing to do is to review the plan. It is the standard coaching or performance cycle where review is key to tailoring the plan to your business needs.
This follows the same format as reviewing your strategic plan.
The most important thing is to ensure that once implemented, the plan is continually monitored and reviewed as necessary to deliver against the business vision and objectives.
You need to assess the progress to date and then analyse how the business can deliver even greater growth perhaps.
Just as with a growth strategy cycle, this is a business plan cycle. In fact the two planning tools are both related and so form part of the business cycle review (and you can insert strategy, growth or marketing to suit the circumstances).
An annual review may be sufficient but at Inspires Growth we work with our clients on a quarterly review basis. This provides for sufficient time to determine trends and is frequent enough for most instances of understanding changes in the market that influence the performance of the company. This is not to say that it works for all functions. Where businesses are very much focused on sales, the targets may need to be reviewed each month in terms of the operating plan along with weekly targets and reviews.
Strategic objectives should be reviewed whenever there is a step-change in the market, the environment (such as new legislation) and when there is a change in management.
The important thing to remember is that we are aiming to be as focused as we can on delivery against the plan and to inspire growth and maximise profits we need to maintain a dynamic position with any plan or strategy.
This completes this section – I hope you have managed to pull some value from the blogs. Business growth strategy is my passion and I hope that some of this has rubbed off on you so that you can take your business towards those goals that form your vision. Good luck. If you need help then simply email me firstname.lastname@example.org
Who or what inspires growth? Well, simply stated, you do. You know your business inside out. Your business plan for growth is taking shape and we come to details of what should be included so we can measure contribution. Each business plan should incorporate a series of targets and objectives in order to maximise success. Think about the following when you write or commission a business plan for growth for your company.
We have reinforced the need for SMART objectives because without being Specific, Measurable, Achievable, Realistic or Time-bound the objectives set within any plan are unlikely to be realised.
Targets that are SMART focus the attention of everyone involved in any action to deliver against their own remit. This can form the basis of a performance management system for all employees.
You can easily monitor the performance of any factor using a defined set of metrics or performance indicators. These can be:
- sales or profit figures over a certain period
- defined milestones
- comparative performance or productivity for individuals
- statistics relating to market share or change in relative indicators (nearly the same things)
If a business is to meet its targets then they have to channel that attention through individuals. There are very few people within companies who do not excel in knowing how they fit into the company and what they are expected to do to help the business deliver against its objectives.
By setting clear and realistic objectives for each individual and closely monitoring their performance against the overall delivery, you enthuse and inspire people. They become more effective and usually more efficient – which helps deliver the overall plan or strategy for the company.
The setting of clear targets and objectives that are realistic (and inherently SMART) forms the basis of individual management. The reviews and appraisals objectively assess the contribution for each individual within a team.
The business strategy that you develop needs to be implemented and reviewed. People need to be reviewed. The two need to be coordinated. A business plan needs to be implemented – using an external person to help with this process is a great way to assess the real impact. The chances are that if you feel the business plan will add value to the company, you may be prepared to invest in someone who can advise you on business growth. If you feel that there is no point, then realistically there is no value in your plan – either start again or hand it over to someone like myself to prepare one that you do value.
There will be costs associated with any course of action – the objective is to define the added value from having written your strategy and business planning documents and implement them so you realise that value. It then becomes an investment.
Each unit or division within a company needs to feel that they are a key part in the development of any business plan or business strategy. It is important to have the unit head work with their team to define an appropriate plan. This should then be reviewed against the needs/plans of the other unit heads so that the whole company has a sign-in to this process. It is critical to ensure that the budgeting and priorities are set for each unit and that the plans are SMART. (We keep mentioning SMART being important, but there is nothing worse than defining a plan and having actions for teams that cannot be completed because they are being sent to an exhibition or another unit is deemed to have a greater return on investment and will therefore use the available finances).
The overall plan will probably have less detail than those from individual units. It is so important to understand the boundaries and factors that may affect delivery of each action for any unit. The whole idea is to have a cohesive plan that sets clear objectives for the business and is structured in such a way that each unit can clearly define what they have to do and by when, and most importantly, what the impact of them not achieving the desired output would be.
The person coordinating the planning must therefore have clarity of process, ensure that all individual plans are coordinated to deliver for the company and that each plan can be run by the unit. There is a requirement for the overall project manager to also review each plan and have units work together at the appropriate time to deliver against the goals. This requires the manager to communicate clearly and frequently with the whole team of unit heads to prevent instances of duplication and have plans being pulled together or implemented where every unit head understands how they correlate to each other.
Typically, you should be able to inspire growth within your team that then enhances what each unit contributes to the overall strategy or business plan. Having a business growth advisor ready to offer guidance and act as a mentor should be seen as a positive addition to the development of any business. The mentor allows you, as the business owner or senior manager, to work on the business in a SMART way. There is an expectation that your contribution will be so influential in growing a business. Please remember that the only plans that work are the ones that are implemented. Many of us fail to implement a strategy or business plan because we feel or think it will cause too much discomfort. Do not worry, it is meant to. Without discomfort, we cannot move forward. Too much, and we might move back. A balanced perspective is the best route to success and that balance requires an external input.
Business plan for more complex companies
If your business has a number of different divisions and/or you operate from more than one site, each with its own targets and objectives, you may need to draw up a more sophisticated business plan.
Each of the separate divisions or sites will need to generate their own business unit plan and the combination needs to incorporated into one overall business strategy document for the entire company. This can be a complex task but each business unit cannot operate in isolation within a larger company. The actions of each unit need to be managed and controlled so that a consistent strategy is defined and successfully implemented for the overall business. The same situation can arise in smaller companies where different people (units) are trying to achieve quite divergent strategies in separate markets and/or products/services.
A business plan for growth requires you to act as your own business growth advisor. If you plan effectively you will find it inspires growth – and you can always ask for help.
The task of the senior manager will be to prepare a business plan that successfully coordinates all the requirements and drivers from each unit into a holistic document that provides the right level of detail to inspire growth.
A key feature is to ensure that a consistent set of planning guidelines (or template) is used across the whole company.
Plan and allocate resources effectively
One of the outcomes from a business plan is to allocate sufficient resources across the business such that the objectives are achieved.
If you use your business plan as a tool to help you reach your next objective, it is important to determine how you allocate your resources to ensure that the strategy can work.
This could mean that you have to recruit staff or invest in additional supplies or equipment, or spend more on the marketing for your business.
The finances for this growth can come through current cashflow, additional profits or external sources.
It is often preferable to fund growth from revenue. The other options can work out to provide for faster growth and would be of real benefit if you are in a position where your time to market could be significantly faster than your competitors. The additional revenue in the future would therefore outweigh the additional cost incurred in financing the actions/plans.
We have previously looked at growth strategies and seen the importance of retaining current business. There are instances where future growth plans have higher priority and this may mean the available finance has to be targeted to specific projects to ensure they have sufficient funds to deliver success and important future growth for the company. This may mean having to cutback in certain areas.
As you go through your planning stage and get down to writing your plan so that it can be reviewed, please remember that you are probably one of the few people who can actually explain to another person (customer, supplier or investor) where your business is and where you see it going – they will be able to share your vision.
A business plan that inspires growth for your business is a very valuable tool and time needs to be invested to prepare and regularly review the contents so that you can deliver growth without the need for a business growth advisor. Obviously, if you choose to use the services of a company like ours, you have the expertise available to assist you to make the right decisions. It simply inspires growth for your business.
The business plan usually has a series of information on business facts – name, company registration number (if applicable), your solicitor, your accountant, your bank etc. Operational information is also included to document where the business is located, your suppliers and the type of premises and equipment you currently have (and then look at what is needed to move ahead with your growth strategy).
The plan should include a summary of what your business does, how it has got to where it is and where you want it to move to (your vision). You need to include a section on what strategy you are going to implement in order to enhance your sales and processes so that you can achieve the growth you want.
The business plan will be short to medium term, generally covering the next 12 to 24 months. Ideally you will use this as a dynamic document and review the business plan periodically – mention in writing how often you will review the plan and then schedule it in your diary. We have all imagined scoring the winning goal, or winning the lottery, but we need to be in to win.
The business plan is a springboard to your marketing plan and if you are not seeking finance, this marketing plan is an essential by-product of your business plan (even if nothing else gets done).
You will want to include your marketing aims and objectives. We shall look in the future at how to develop a marketing strategy – but in essence this is similar to a growth strategy in concept.
Your business plan should include a summary of what your business does, how it has developed and where you want it to go. In particular, it should cover your strategy for improving your existing sales and processes to achieve the growth you want.
Any good business plan will be able to make a decent objective view of various financial statements that can include cashflow forecasts, sales forecasts, profit and loss and balance sheets that show the last 3 years of trading (if available) and what you would expect for at least the period covered within the business plan (that can be anything from 1 year to 3 years forward financial plans).
You need to summarise any SMART objectives – namely what the targets are with assigned tasks and owners of them, when they are to be delivered and how much that is likely to cost.
It is never too early to define your exit strategy. This will look at whether you wish to pass the business on to a family member, float the company on the stock exchange or sell into a larger company. This allows you to focus the mind. There is an end point that delivers a certain value. This prompts clear and concise strategic thinking and tends to promote tactical delivery.
If you intend to present your business plan to an external audience such as investors or banks, you will also need to include:
- The aims and objectives for each area of your business
- Historical details of your business, including financial records from the last three years – if this isn’t possible, provide details about what has happened to the current time
- The skills and qualifications of your management team – why the bank should trust you
- Details about your product/service, its unique selling point and its fit into the marketplace
You are looking for business growth and have a business plan that may be a little out of date. So, when and how do you review your business plan? That depends on your business and how accurate your current business plan is – which probably means that it is next to V in your alphabetised documents list – under “very frequently used document”. There is no right answer. The plan should be reviewed often enough to allow you to check that key milestones are accomplished. How you review the document is up to you. If everything is according to plan – on track – we might not undertake more of a review than checking we have achieved what we were expecting to and ensure we are clear about the next period of time. We would advise people to be checking against quarterly targets which is why our retainer contract offers quarterly review and update sessions with our clients. Knowing what they have achieved gives a sense of satisfaction and confidence – knowing that what they aim to do is still valid and setting actions appropriate to these goals again inspires growth for that business. Having a business growth advisor will enhance this process but you can easily do it yourself.
Who should you involve in the regular business planning process? The key people in your business need to be part of the review cycle.
If you undertake regular assessments of where you are versus the plan and targets set, you are more likely to spot any variance – which means you can be proactive and set things straight. If you had a sales target of 1 million units for a year, you are unlikely to ignore the data coming in each month that suggested an actual sales forecast of 240,000 units until the year end. You would see that on average you would need to sell just over 83,000 units per month. After 1 month where you had sold 20,000 units you would be able to implement either a change in target to 240,000 for the year (not what you had planned) or be proactive in setting a new sales target and associated promotions that would deliver on average a sales volume of just over 89,000 units per month. Over the year the extra 6,000 might be achieved. If you waited until the half year to be sure, you would have sold only 120,000 units and have a target volume per month of over 146,000 units. This is about 175% of your original target!
The assessments do help with any discussions with your financial providers (banks and investors) as well as potential buyers. They know exactly what they are buying into and therefore cannot negotiate so steeply downwards on price! Therefore regular assessment enhances the value of your exit strategy. It also provides a reassurance for your staff, your clients as well as your suppliers.
Knowing where you are and where you will be in the future therefore inspires growth, inspires employees and should inspire the business owners as they look to a future sales value of the business.
If this is not the first time you have had to tackle a business plan then you will probably have written one for the benefit of the bank or another investor. The banks very often will not allow one to open a business bank account without knowing a bit more about your business. Investors want to understand how and when they are likely to see a return on their investment. So we take time to prepare something that suits them.
With all due respect, this is the worst reason in the world. The reason for building a business plan is that it can provide you with a benchmark for the business over the longer term. How fantastic is that? Why wouldn’t you invest time to obtain a return on your time and effort? Putting that little bit extra effort into building your plan will allow you to extract maximum benefit from your business – and you will understand when that can be taken and what the impact will be. The positive thing here is that by helping yourself, you also help the lender decide that your company is worth the investment risk.
Think about making a journey in a country that you do not know. Most of us would be horrified if we simply headed off in a direction we thought was North because our destination was North of our present position. If we have no way of knowing where we started and where we need to be at different times, we would not be able to agree to meet someone for dinner at a specific place. If we know where we start, ensure we have fuel in the tank and plan the route, we will know if we are going to be late, and not only that we are late, but be able to provide a best estimate on when we would arrive. A business plan is just the same.
A business plan for growth helps you to allocate appropriate resources within a business. It is a tool that can help you attract new funds or that you can use as a strategy document. A good business plan shows how you would use the bank loan or investment you are asking for. Using a business growth advisor will allow you to bounce ideas off them and obtain the best chance of securing that assistance you require.
It is essential to be able to assess whether you are meeting your business objectives. It will allow you to identify where you are now and where you need to be and provide the basis for change (change happens to any business that continues to operate). It ensures you meet key targets and will allow you to manage priorities.
Planning is a critical success factor for any business throughout its life cycle.
Every business needs to regularly review its business plan and the most successful are using the business plan as a dynamic tool to identify performance and future growth.
The business plan has to continually ensure it meet your needs and responds to variations in the market, the economy, your clients etc.
Many companies either do not have a business plan or have the one they prepared years ago and left in the cupboard, after all, it was only for the bank or some other authority! Not using the business plan is akin to playing a game when you don’t know the rules. The referee is always stopping you when you break a rule – well, the business plan is similar in that we do not understand why we are doing things, but without the control offered by the referee when it starts to go wrong.
You need to maintain a dynamic plan as most things in life change; the faster the rate of change for your particular business sector or market, the less likely a static plan will deliver you any growth – in fact, shrinkage is a likely effect.
We will look at a business plan as a useful tool that has real value within your business. If you spend time preparing an accurate business plan, you will expect to get a return on that investment. Whilst that is not always guaranteed, what is known is that more businesses fail who fail to plan than those who invest in planning and maintain that investment through their growth.
Because you are the best person to write your own business plan, we will work on that as the first objective in this section. The reason you will probably write your first plan is that there will be a cost from having a company such as ours write it for you. There will also be more ownership and commitment to work if you identify where the real value is with your business.
If you are an established company seeking commercial funding from a lender, we can help you prepare your story. Simply contact us at email@example.com and we can work together to try and get that injection of funding. As business growth advisors, we ensure a company is well positioned to maximise your chances of success.
If you approach a lender without the necessary paperwork, you are less likely to have your overdraft approved and for a commercial loan, you will almost certainly need what we can provide so that you can grow your business.