Steven Mugglestone

The more I learn, the less I know

Do you rethink your business plans?

with 4 comments

Our research shows that most businesses need to review, and probably renew, their business plans and strategy, if they have a formal plan at all.

Large and established businesses have Finance Directors and/or Strategic Directors to prepare and monitor formal business plans, but many SMEs do not adopt the formal approach and carry on with a mixture of gut feel and entrepreneurial spirit.  Even if they do have a formal plan, it is probably collecting dust somewhere, or sitting in a desk drawer, lost in the filing.  Can your accountant help you with a real plan, do they have the experience.  Have they already helped you prepare a plan and helped you address and review it.  If not, it is likely that you are not getting the right support to really help you and your businesses succeed.

Given the environment that all businesses are facing, surely it is the right time to stand back from the chasing, the existing and/or the struggling and to start to think about how your business needs to be directed, controlled and rejuvenated.

We have outlined below some of the things that every business needs to stop and think about.  Really you should prepare a formal plan and use it to help you drive your business.  If you have a plan, then great, but now is probably the time to dust it down and have a rethink.

Your Underlying assumptions
Does your business really operate as you initially planned and expected.  Can you stand back and review your assumptions – are they still valid or do you need to revise them?
Your Focus
Did your initial plan concentrate too much on internal matters or on the right customers?
Your Customers
Are you satisfying the needs of an ever more value conscious, more demanding market?
What changes do you need to make to ensure competitiveness of your product/service offering?
Your Markets
Are you in the right markets, product/service/geographic – are there new growth opportunities to be exploited?  What new technologies might you use to kick-start growth? What merger and/or acquisition opportunities exist? eg from competitors in distress or those sharing the same goals as you.
Your Competitors
How have your competitors responded to the downturn? Have they focused more on innovation and growth than pure cost-cutting?
Your Funding Structure
Is it still appropriate or are there alternatives available?
Your Internal Resources
How flexible is your organisation in adapting to the changes brought about by the recession?
Could you source supplies from a lower cost supplier or even country? Are outsourcing options available?
Your Financial Performance
How cash generative is your business? Where could you improve margins? Have you identified surplus costs? What opportunities exist to improve your operational efficiency?
Your Internal Talent
Are you acquiring, identifying and nurturing the best people? Do you have the right leadership and people in place to take your strategy forward?
Your Relationships
How are you protecting relationships with customers, staff, suppliers, stakeholders? Are you communicating transparently to them?

The key to a successful business is not just having an initial good idea; it is about working on your business and not just in it.  To succeed you need the support of advisers with the experience and expertise to help you build a successful business and that starts with a plan.

To find out how we can help all SME businesses with this real pro-active support, experience and background feel free to contact me at steven@mcgregorsbirmingham.co.uk or call us on 0845 519 5659.

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Written by Steven Mugglestone

April 30, 2010 at 3:49 pm

Posted in Helping Business

4 Responses

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  1. Hi Steve,
    read with interest your comments.
    Wonder if what you are proposing for SME’s is a little bit too rigid.
    I have come across businesses that don’t bother with formal budgeting routine as these are generally out of date before the inks dried on the paper!
    What they tend to do is adopt the flexible approach i.e. forecast next 3 months reasonably accurately using orders in hand / potential order wins as a basis for the revenue line and known cost structures to achieve this revenue and then forecast next 12 months using annual trends. These are then updated monthly / quarterly as required always using the first 3 months of the forecast as equating close to actual.
    For formal targetting of departments / managers / staff they use last years results as the benchmark to performance.
    Then, of course, you may have those organisations aligned to Lean and using the new accounting paradigm of value stream accounting where their sole interest is the result of the whole and elimination of waste. Bit more technical but an interesting interpretation of managing and targetting performance.

    Graham Lewis

    May 5, 2010 at 11:39 am

    • Thanks for the comments. I am a believer of horses for courses and try to fit a “plan” and “structure” in the broadest sense from the big formal stuff to the easy one pagers. The importance is recognizing the key points and key drivers and stand back sometimes. We use some simple software to create one page plans for smaller businesses to try and focus on the key issues and benchmarking is really valid as it helps you compare and address areas that need some “tlc”. We have access to more detailed sector specific benchmarking information from an accountants database (rather than just companies house), to help clients understand what they are good at and what’s not.

      I agree with you Graham, don’t treat everyone the same, but try and improve and stand back for a more strategic route.

      stevenmugglestone

      May 5, 2010 at 11:51 am

  2. Hello Steven,

    An interesting piece and one that certainly warrants consideration. With experience from my wife’s company (she’s a sole trader so way to small for this type of offer) Are the costs outweighed by the benefits?

    Do you offer real advice on how to maximise sales and revenue (e-mail marketing, mail drops telemarketing ) or do you just highlight that there is a need to market and a need to reduce costs?

    What would be an average price for such a service?

    The reason I ask as Business Link offered a basic service and only suggested she needed to market more and would not suggest / recommend anybody to talk too or which option to go for or how much to pay.

    She has been burnt so many times before with failed promises and costly and ineffective advertising she has “closed the doors” to any suggestions on how to improve.

    So in a roundabout way what I am asking do just measure and then report or do you measure report and then help implement with key partners that are trusted and proven? As I feel this would be certainly more beneficial especially for my wife.

    Glenn Watts

    November 5, 2010 at 3:45 pm

    • Hi Glenn

      A quick answer to you is yes we do and we are working to ensure that we can make the support be really cost effective for small businesses. We utilise and easy and effective software to put together one page plans and we have access to a UK accountants database to provide benchmarking. The one page plan sets up an easy way of what to concentrate on and what to measure. We also have two business development areas and an easy (and free to our clients) marketing support area (on line review, monthly campaigns etc, etc. Have a look at the link below that has some of the details on Youtube.

      Yes we can undertake bigger business plans etc, but we are working on making this accessible and costs effective for our smaller business clients as well.

      stevenmugglestone

      November 5, 2010 at 4:58 pm


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