An effective Business Plan
An effective Business Plan – a key strategic element in running a successful business
In these challenging economic times companies find themselves more often operating on a day to day basis and strategic planning is not considered important. The preparation and implementation of a business plan is an essential part of a continuous strategic planning process and key to a review of the business, supporting funding requests and a requirement in any due diligence exercise when assessing an acquisition opportunity or the divestment of the business.
For small and medium sized enterprises, (SME’s), it is often the case that, apart from when a company first commences trading, there is no formal annual update of a business plan. In some cases a company commences trading and grows without a business plan ever having been produced. In an economic downturn not having a business plan, coupled with a capability to deliver it, can hinder the future of the company both in the short-term and strategically.
A business plan is usually covers a three to five year forward looking period and encompasses the objectives of the company – strategic, business and personal – and covers the key elements of products, services, sales, marketing, systems and management backed with financial plans. Once agreed, the implementation of the plan is via board or management meeting action plans and a review process, with the first year of the plan forming the detailed budget against which actual and forecast performance is measured.
It should be emphasised that management need to understand how the business plan will be delivered and achieved. Recognition of how macroeconomic influences could impact the outcome, the risks of success or failure, business capability and capacity are of paramount importance. The timing associated with leveraging of opportunities, investment and gaining market share to maximise the potential of the business are all factors that will drive sales, profits, cash and overall long term growth.
Contact MW Interim Finance for assistance in producing or revising your business plan, or to provide a review of your capability to achieve your business plan objectives.