17 Jun Taking time out for business strategy and planning
As a business owner or manager the day-to-day operation of your business is vital for success. BUT just as vital is business strategy and planning, the problem is it get pushed to the side time after time as operations take priority or people believe it is too expensive.
The effect of this can be that your business is slowing or competitors are overtaking you. Often it is that you are too busy working IN the business to focus on working ON the business.
This is when business planning and strategy is vital to help you sustain and grow your business. The main focus on what this can help with is in:
- DOCUMENTING your goals
- Developing ACTIONS to reach them and
- MEASURING how you are tracking.
There is no hard fast process or approach but the below is a general outline of the elements we suggest you have within your strategy.
- Vision – Why are we doing this?
- Mission – What do we want to achieve?
- Values – What makes us, us?
- A critical understanding of the business as it is today and where you have come from
- Objectives – Which can be measured and have a timeframe for completion
- Actions – What you need to do to meet the objectives – this year, 2 years from now, 10 years from now.
- Review schedule – To determine if you are on track.
The last point is really important as it provides you with a framework for review of your strategic plan.
Your business changes so you want to be sure you plan changes in line with it. You want to be held accountable and you also want to be able to see your hard work coming to fruition.
Business strategy and planning in action
We recently worked with a business who had approached us due to ongoing cash flow and job costing issues. ‘
The Client’ (as we will refer to them!) was repeatedly experiencing pinches in regards to on hand cash in order to make its payments to suppliers and was repeatedly ‘sweating’ on payments to be received from clients the same days that the payments to those suppliers were due.
After speaking with them further we realised that they had made a cash loss for all but one month of the first half of financial year 2015/16. Additionally, ‘The Client’ was struggling to understand whether the jobs that they were winning were profitable as they had no way of knowing, from the information on hand.
The Review & Plan
BusinessBasics was engaged to:
- Provide cost/sales analysis and management support to highlight problem areas for the business.
- Assist with the development of targets for senior staff, as well as provide mentoring in regards to the methods of managing the implementation of the same with the incumbents.
- Assist with the development of job cost tracking tools to streamline the process and determine what work was making, and what work was losing money for the business.
Over the first five months, with the assistance provided by BusinessBasics, ‘The Client’:
- achieved invoicing of 25% above projected invoicing levels.
- had a reduction in cost of goods sold per dollar of sales of 2.38%.
- had a reduction in the operating costs of the company of 22.77%.
- returned to profitability for financial year 2016.
- established and maintained a cash surplus with the company’s finance provider
Often it can easier to undertake your strategic planning with the assistance of an outside party.
We provide not only a fresh set of eyes and ears, but also extensive experience in strategic planning.
If you are ready to make your strategy and planning a priority, we urge you to get in touch.