Business Plan definition: The business plan (or strategic plan) is the document that sets out the company’s strategic direction, its main operating and financial targets, the actions it will take to achieve those objectives, the new initiatives and investments planned, and their impact on the company’s performance. It is a living document, which can and should be referred to and amended periodically.

The Problem

When did you last refer to your business plan? How familiar are your senior team with your strategic objectives? How often do you amend your plan when you make a decision to change direction?

It is a common cliché, which usually means it’s true: ‘how can you expect to reach your destination if you don’t have a proper roadmap?’

Creating a well thought-through, comprehensive business plan is an arduous task. Thinking through objectives and likely outcomes which may occur many years down the line is, by nature, challenging. But it is the hard work up front which makes for lighter work down the road as all of our team of part-time FDs will attest to. Most CEOs and MDs simply don’t have the time to spend on quality strategic thinking and to document and communicate that thinking in a way, which allows the whole business to buy into the vision.

Harder still is managing the business plan. Significant strategic course corrections are commonplace in fast growing businesses. These should be embraced. The tricky part though is in managing regular change. That requires a combination of time and specialist knowledge. There is an art and a science to effective business planning and getting it right brings a real sense of clarity and direction to a business – this is where an experienced part-time FD can make a significant contribution.

Not spending quality time on strategic planning (and this should be a regular, ongoing activity) usually leads to a chaotic working environment. Our clients often talk about ‘not feeling in control’ and ‘not really knowing what is coming round the next corner’. When the plan is weak, business owners tend to operate without the same sense of conviction as those who allocate time and expertise to the planning process.

Our part time FDs often find that our clients have done some good planning and strategic thinking but lack that objective third party who can play devil’s advocate, ask the right questions and help to steer the ship in the right direction.

Being a CEO or MD without a high level ‘finance person’ to bounce ideas off can be tough. FDs often possess a different (but albeit complementary) set of skills to CEOs/MDs. It is natural for business owners to bring people into the business who see the world in the same way as they do. It is often more valuable to have key members of your team who possess very different skills to your own. Constantly doing the same things in the same way with the same people will usually lead to achieving the same results.

If you are worried whether you have the right team in place to fulfil the vision you have for your business, you are worried you have the funds you require and you are worried whether your existing business plan consists of the right components to reach your objectives then we would recommend you take the time out to work through the detail. It is rare to see a business succeed if it doesn’t have a robust plan.

Our part-time FDs often work with clients who started off with intentions to run a business and have ended up working in a job. With the right business plan in place the business owner is able to run the business without getting drawn too far into the day to day details. Proper business planning is very liberating for the business owner. Whether the objective is to create significant income for shareholders in the short term or build equity for a pay-day further down the line, a well constructed and regularly reviewed business plan will instil real confidence that the objectives are indeed possible!

The Solution

The development of a comprehensive, ‘living’ strategic business plan is critical for your company’s long term growth and stability. Businesses without a plan often operate in a more chaotic and disjointed way and make life hard for themselves. Everything stems from getting a robust plan in place and communicated out to the business.

Following on from our in depth review process,  a part-time FD will work closely with you to develop your business plan and your timetable for implementation in order to:

• Gain a full understanding of the business and its operating procedures
• Work through the existing strategic plan with the business owner and make necessary changes to build a plan which clarifies how the company’s objectives can be realistically achieved
• Agree milestones and break down the plan into annual and quarterly targets
• Conduct a fresh SWOT (Strengths, Opportunities, Weaknesses, Threats) analysis bringing the plan up to date
• Conduct a fresh PEST (Political, Economic, Social and Technological) analysis bringing the plan up to date
• Carry out a full competitor analysis to understand in detail what is and isn’t working in the market
• Explore opportunities for effective market research to enable innovation and development of new products/channels to market/operating procedures
• Identify key players in the business
• Identify skill gaps in the business
• Agree financial incentive structures to retain and motivate key members of the team
• Identify 5 key metrics for determining what the future course of the business should look like
• Agree the exit strategy
• Develop a clear, coherent message (vision/mission/purpose) to staff and to customers
• Work with the senior team to ensure individual department goals are aligned with the big picture strategy
• Agree a who/what/when set of objectives for all department heads
• Implement accountability protocol for every member of staff
• Determine methodology which allows the senior team to course correct periodically when a change in strategy is required
• Agree delegation of authority to department heads to spread responsibility across the business and to free up the CEO/MD’s time
• Create feedback route so that strategic goals are shared regularly with staff
• Develop a set of relevant KPIs (Key Performance Indicators) and a system which allows for regular (daily/weekly/monthly/annual) monitoring and reporting
• Develop a long term efficient tax structure for the business and for key employees
• Identify key outsource suppliers/advisors and in particular corporate finance contacts

This process will instil a deep feeling of confidence both within the senior team and throughout the rest of the business.
 

Benefits To The CEO, MD And Senior Team

Installing an up to date business plan or ‘roadmap’ in your business will allow you to experience a sense of control, which may have been absent since the day you started your company.

The business plan (and the methodology for updating the business plan) will remove a significant amount of confusion from your operating procedures. There will always be challenges contained within new projects, which arise, but now you will have a proper framework against which all decision-making can take place.

The plan provides the blueprint for delegating responsibility out to your team and allows you to create some space in your own environment to work on growing your business, with your part-time FD as a constant guide and sounding-board.

You will move out of the chaos and into a more serene working environment where each of the cogs, which make up the bigger system, is able to move in harmony.

Potential hazards will have been identified in advance and dealt with before they become unmanageable. You will be able to move from a culture of fire-fighting to a culture of fire-prevention and the benefits will be felt by each member of your team and most probably by your customers too.