Business Strategy & Planning

No matter how immediate or urgent the pressures are today, you must find time to take a fresh look at your business and plan ahead accordingly. Your business plan should aim to achieve a good balance of tactical, short-term management and longer term, more radical change.

The process of business planning requires you to recognise some important fundamentals of business management:

· Without a degree of financial stability and some funds to support growth, your business may have difficulty surviving.

· Your management team must understand and agree over the basic purpose of the business that you are in and the growth objectives for the future.

· Your company must have committed resources to the planning process right down to individual action plans.

· Organisational structures must be in place that are regularly reviewed and contain a high degree of management competence.

· Your internal management information systems must provide you with essential data to control your business.

· Investment in people resources can achieve internal strength and stability.

The following section will enable you to focus on some business fundamentals. See how many statements are really worthy of your "agreed" response.

A1 - Fundamentals of Business Management:

Financial Stability	Strongly Agree	Agree	Not Sure	Disagree	Strongly Disagree	Good Business Practice
Our balance sheet is sound.						Always make sure that you understand your financial position.
We are generating sufficient funds from our operations to fund our growth.
We have an accurate picture of our cash position on a day-today basis.
We have a good relationship with our bankers.

Vision & Values	Strongly Agree	Agree	Not Sure	Disagree	Strongly Disagree	Good Business Practice
We have a vision of the future of the company contained within a mission statement.						Make sure you discuss the vision for your business with your management team –communication is vital.
All our employees share our vision of the future of the company.
We have a written statement of the major changes we expect to implement in the next 5 years.
We have a set of values against which we plan our business.

Strategy & Objectives	Strongly Agree	Agree	Not Sure	Disagree	Strongly Disagree	Good Business Practice
We have an established long-term planning process with clear corporate objectives.						Planning does not have to be complicated- keep it simple
We have translated our corporate goals into clear profit related objectives and described the business strategy for achieving those objectives.
We have a written business plan, which details the planned allocation of our resources to fulfil the corporate objectives.
We have operational plans for each for our functional areas that are linked to the corporate plan.

Organisational Structure	Strongly Agree	Agree	Not Sure	Disagree	Strongly Disagree	Good Business Practice
We have a clear organisational structure suited to the strategic direction of the business.						Do not organise your company to suit individual personalities structure it to do the job effectively.
We have a review system to keep the organisation structure under regular scrutiny.
Our structure includes a management team who each have clear responsibilities defined in terms of the results to be achieved.
Our managers are all competent in their jobs.

Performance Systems	Strongly Agree	Agree	Not Sure	Disagree	Strongly Disagree	Good Business Practice
We prepare monthly management accounts for comparison with budgeted revenue and expenses.						You cannot have too much performance data but you must analyse and use it effectively.
We regularly discuss performance with individual managers using management accounting data.
We understand exactly which products and services make us money and the magnitude of the profit.
We regularly review financial resources against our plans.

People and Skills	Strongly Agree	Agree	Not Sure	Disagree	Strongly Disagree	Good Business Practice
We invest in the training and development of all our employees.						Involve all your employees in your business and ensure that you have a committed workforce.
We have systems for rewarding managers and employees who consistently achieve more than their planned results.
Our employees are motivated and committed to achieving the corporate objectives of the business.
Our managers are well versed in the financial parameters of their operating areas.

Most businesses today would find it difficult to agree with the majority of these statements. Even if you have planned your business well it is no guarantee of financial stability and your organisation and people management systems are probably still in need of attention.

You need to focus on the critical areas where you were forced to "disagree" or "strongly disagree".

Better business management requires you to address dozens of different improvements that you could make to your business. In developing a focused plan you need to:

• Consider the complete business process and
• Do the right thing well.

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