Running a business takes determination and focus. But sometimes it’s difficult to see the wood from the trees and see all the options available to you. Use this 6 step process to assess and consider new business plans
Why do a Business Plan?
A Business Plan is imperative to secure finance, but it is an important road map to give direction, to ensure focus on objectives and it should be reviewed regularly. Invariably a business plan will change from year to year. A business plan will refer to a marketing plan and a marketing plan is important to all business and should be developed on the outset of a new business activity.
Involve staff as much as possible in the business planning process as it can be a great team building exercise.
Why do a Marketing Plan?
At the same time as doing a Business plan, do a Marketing plan. Growth or Retraction … your business will still need marketing. Good marketing tells a story about your business and gives your customers a reason to purchase from you instead of the competition. Marketing can help you attract new customers, focus on satisfying their needs and build lasting relationships. Marketing requires research, time and appropriate allocation of budget. Investing time in developing your marketing strategy can help your business grow.
Step 1 - Evaluate where you are now
Before starting a Business plan take an honest, hard look at yourselves and your business.
Look at your threats, opportunities, strengths and weakness and consider your financial situation (SWOT analysis).
Compare yourself against other businesses in your industry. See if WLM can run a Benchmarking Report for your industry, this can be useful to identify key issues.
Step 2 - Review Business Goals and Set new Business Goals using the “Balanced Scorecard Approach”
By setting new business goals for all aspects of your business this may be enough to give your business the kick-start and growth you require without incurring the risk of a new business venture. Alternatively by reviewing and setting goals through looking at each perspective of the business, – ideas for growth may blossom.
A Balanced Scorecard is a management and a measurement tool to ensure your business is working towards a “balanced” set of goals and through Key Performance indicators tracks your progress.
Involve your staff in the review and goal setting process. At the time of creating goals, determine the appropriate key performance indicators with the help of your accountant.
You will set goals in the five perspectives: Financial, Customer, Internal Processes, Human Resources and Learning & Growth.
Step 3 – Perform a Risk Analysis
In reviewing the different perspectives of your business consider the risks involved, attempt to quantify the cost of those risks and consider ways to mitigate the risk.
For Example, a sudden dramatic change in your business can lead to staff turnover and the cost will be recruitment and training costs and potential cost of service delivery. Mitigate risk by introducing change at a steady pace and involve staff as much as possible in the process. Do thorough checking and testing of employees before employing them.
Consider the legal requirements for your current business and potential new business activities.
Step 4 - Prepare a Budget and Cash flow Forecast & Review current cash flow issues
Do a Profit and Loss Budget and Cash flow forecast, based on your current situation and then rebuild these forecasts to include your new business plan or new goals. Ask us at WLM to assist you with this, as a good cash flow forecast incorporates timing of tax payments, debtor and creditor payments.
Step 5 - Now you are ready to write your Business Plan.
www.Business.gov.au provides free business plan and marketing plan templates. Using the information gathered in Steps 1 to 4 you can complete these templates.
Step 6 - Implementation and Measurement
The business plan will guide you in the implementation – i.e. who will do what and when.
You will need to measure progress and you need to be alert to warning signs when things might not be tracking to plan.
At very least there needs to be quarterly reporting and consult WLM for assistance in this. There are many software tools in the marketplace for us to use, to keep this process painless.
The Balanced Scorecard will identify the key measures you will want to be reporting on regularly.
Okay for plans to change, invariably they do but update your budgets /cash flow forecasts with new significant changes.
WLM has the experience and knowledge to give you an independent point of view using valuable insights and perspectives. We’ll also provide you with the tools and resources to keep your business running smoothly – and help you keep it On Track.Please contact WLM for a more tailored solution to your business planning.
Amanda Rogers, FCPA
WLM Associate Director